CoL left with £450,000 Halliwells bad debt
The College of Law (CoL) is owed almost half a million pounds by Halliwells relating to unpaid LPC fees for the 2009-10 financial year.
Nigel Savage
The institution, which ran the LPC for Halliwells’ trainees on an exclusive basis, is one of dozens of creditors owed a total of £14.1m by the law firm, which went into administration in July this year.
CoL chief executive Nigel Savage said that the organisation might be left with no choice but to write off the bad debt, which amounts to £448,293.30.
“They owe us [but] because we’re unsecured creditors, we’re further down the list,” he explained.
“The primary thing was to make sure that the students could take the exams and make sure they were placed with firms.”
Savage said that he “had no inkling” of the financial difficulties Halliwells was going through, “except that our debts hadn’t been paid”.
“We gave them time to pay like you would in any other situation,” he added.
The first report to creditors from Halliwells administrators Dermot Power and Shay Bannon of BDO, a copy of which was leaked to The Lawyer, revealed the names of businesses, barristers and expert witnesses owed money by Halliwells.
These range from the HMRC, which is owed £4.3m, to dozens of small businesses such as Pavarottis Sandwich Bar on Threadneedle Street, from which the firm ordered thousands of pounds worth of food up until the day it collapsed (20 September 2010).
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Readers' comments (32)
Anonymous | 21-Sep-2010 10:13 am
Presumably any barristers / experts that are owed money will be paid eventually if the cases Halliwells were working on are ongoing in the phoenix (if that is the right word) firm.
Did Halliwells have enough prospective trainees to rack up £500,000 in one year on LPC fees?
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Accepting of responsibility | 21-Sep-2010 10:42 am
I would presume that Mr Savage is doing the decent thing and drafting his resignation letter now.
After all a loss of €450k would be sufficient grounds - let alone the comment that he didn't realise that Halliwell's were in financial difficulty ...
... and we trust these guys to be custodians of our future.
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Chris | 21-Sep-2010 11:56 am
Ref Anonymous 20 Sept at 10:25pm. Get a load of the College of Law PR drivel here! Whose criticising BPP and other providers of the LPC?! We're only criticising, and rightly so, the CoL who are involved in this scandal. As a former student of the College, it was obvious to all that the College is a nice little earner, quite how nice a little earner has just become apparent! I wonder, Mrs Business Development, would the College have been so understanding of an individual student who was unable to pay their fees, or is it just one big business doing another a favour? Which puts me in mind of a recent statistic in the Private Eye :
£2bn under-charged PAYE tax that HMRC "cannot afford" to write off, according to Treasury. £6bn tax avoided by Vodafone that HMRC did right off. Are we all noticing a trend here?!
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insolvency lawyer | 21-Sep-2010 12:24 pm
To anonymous at 6.56 on September 20th, on what basis should COL be litigating against Halliwells in adminstration? If the debt is clearly owed (and there doesn't seem any indication that it isn't), there would be no point in attempting to litigate and in any event the administration moratorium would prevent such attempt without the consent of the administrators or the court. All that COL can and should do is hope for a small recovery on any dividend declared by the administrators / subsequent liquidators as an unsecured creditor
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Anonymous | 21-Sep-2010 4:19 pm
The Head of the CoL gets 440,000? As a City partner used to outrageous remuneration, I am still staggered. And his deputy gets 410,000? How much does the Vice Chancellor of Oxford get?
And this guy let an unsecured debt of 450,000 build up? Obviously highly skilled. His comments suggest all the commercial nous of a raw Halliwells trainee after a night on the razzle.
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Anonymous | 21-Sep-2010 4:31 pm
Should this not be referred to the SRA as a disciplinary matter? Are Solicitors allowed to incur debts in the knowledge that they might not be paid? Does this conduct not bring the profession into disrepute?
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Anonymous | 21-Sep-2010 4:31 pm
I wonder which leading legal publication it was who wrote a drooling 2008 profile of this king of managers:
"But then, the energetic 56-year-old does have reason to smile: he has presided over an impressive turnaround at Store Street, which has seen the College of Law evolve into a hungry organisation gearing up to meet the exacting standards of the legal profession in the 21st century."
The article went on to lament his loss of 'designer stubble' quoting him as saying " being told as an 11 year old 'you're no ****ing use to anyone was a defining moment for me"
It ended with the rousing conclusion "with Savage's determination, anything is possible". How very true. Especially massive write offs.
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N | 21-Sep-2010 4:37 pm
Great to see so few solicitors (or perhaps more accurately trainee solicitors) know so little about this country's insolvency law and the Administration process. The continued demise of solicitors with a general legal knowledge I suppose.
It also suprises me to see the ill concieved postings from those supposedly trained to consider the position before delivering opinions. Again a sad demise of a once lofty profession.
So what if the CoL boss gets paid so much, who cares how this compares to the VC of Oxford. I attended the CoL paid for it myself and considered it a worthwhile expense and enjoyable experience (apart from one or two magic circle know it alls).
Finally, credit where it is due well done CoL for helping the students left high and dry by Halliwells out in their hour of need. A tonic to the system in these turbulent times.
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Anonymous | 21-Sep-2010 5:22 pm
Credit to the CoL for looking after the students but wow! When did it become necessary to pay salaries at that level in an educational institution? No wonder there is a reluctance to criticise greed even when it manifests itself in a collapsing firm.
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Anonymous | 22-Sep-2010 3:39 am
Chris @ 11.56am – Since you so explicitly state you are criticising CoL only and not other providers, the CoL is not a "nice little earner" and is not a "big business". As people have repeatedly mentioned it is a registered charity and is therefore not for profit. The top guys are obviously paid well to say the least but it is not a "business" and has to be run in line with charity commission regulations – after salaries and outgoings etc the rest has to be reinvested into the institution itself.
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