The shell business of former Lincoln’s Inn firm Dawsons has gone into voluntary liquidation after failing to pay creditors including Barclays Bank, which is owed just under £1m.
After the firm’s former equity partners decide to enter into a creditor voluntary agreement (CVA) they appointed BDO partners Shay Bannon and Andrew Beckingham as joint liquidators. A meeting was held at BDO’s offices this morning to formalise the move.
Dawsons was forced into a merger with Penningtons earlier this year to halt a slew of exits (3 May 2011).
Penningtons acquired seven equity partners as part of the merger, but it is believed to have refused to accept the firm’s creditor liabilities. The firm had agreed a deal to settle rent liabilities with its Lincoln’s Inn landlords before the merger, but several former partners are believed to still be owed money.
According to a source close to Dawsons one former partner is owed £200,000 by the firm.
At the end of April, following the formal merger with Penningtons, Dawsons changed its registered name at Companies House to 2 New Square and all members resigned from the LLP.
A statement released by Penningtons on behalf of Dawsons former managing partner Martin Codd stated: “It was originally the intention of the Dawsons partners to use a CVA structure to wind up the activities of Dawson LLP.
“Unfortunately, this has subsequently been found to be unworkable because of the stance taken by certain parties and the liquidation of the business was the only remaining option open to us.”
The statement continued: “We’ll work closely and co-operatively with the liquidators to deliver the best result possible for the creditors.”