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Categories:Litigation / Dispute Resolution

Explosive allegations surface in Halliwells court case

18 April 2012 | By James Swift

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Halliwells’ equity partners altered the minutes of a meeting about the £25m Spinningfields reverse premium before passing them on to the rest of the firm, it was alleged in court today (18 April).

The allegation surfaced in a case being heard by Mr Justice Warren in the Chancery Division of the High Court concerning former junior equity partner Michael Burns, who retired from Halliwells in 2009 and joined DLA Piper later that year.

Lawyers for Burns were arguing that the terms of his retirement deed - which stipulated a ‘clean break’ for Burns from Halliwells - provided a complete defence to the failed firm’s liquidators’ demands for cash from the former partners.

However, Lexa Hilliard QC of 11 Stone Buildings, who has been instructed by Addleshaw Goddard on behalf of Halliwells LLP’s liquidators, BDO partners Shay Bannon and Dermot Power, argued that the events surrounding Halliwells’ collapse fell within the retirement deed’s exemption clauses, meaning that Burns was still on the hook.

Arguing the case, Hilliard at one point referred to allegations that Halliwells’ former equity partners had altered the minutes of a meeting about the division of the £24.5m reverse premium deal it had struck with its landlord before passing them on to the rest of the firm’s members.

A source told The Lawyer that, although this was likely the first time such allegations had been made in public, talk of altered minutes had been doing the rounds for some time among those close to the case.

The claims related to the £24.5m reverse premium deal that Halliwells struck with its landlord in 2005, of which £20.4m was shared out among equity partners in 2007 (20 June 2011), with the rest put back into the LLP.

The news comes as Halliwells’ former partners are set to enter mediation with BDO (12 April 2012).

James Potts of Erskine Chambers, instructed by Irwin Mitchell partner John Lord, was acting for Burns.

Burns could not be reached for comment.

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Readers' comments (22)

  • Anonymous | 18-Apr-2012 7:36 pm

    Have the administrators reported this to the SRA?
    If not, why not.

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  • DS | 18-Apr-2012 8:16 pm

    And still the SRA remain silent...

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  • Shocked but not surprised | 18-Apr-2012 9:21 pm

    Oh dear!!!
    Explosive indeed. The lid has finally been blown off.
    Now that allegations of this nature have been aired in open court the likelihood of an SRA investigation must be very high.
    What the scope of any investigation would be is a very interesting question given the serious allegations that have been made in relation to Halliwells, including in the comments section of this website. It would be a fascinating but difficult task I suspect!
    Interesting questions too for Addleshaws' compliance people - presumably any information they hold on these allegations will be passed to the SRA, notwithstanding that it might not be in the interests of the liquidators to do so.... and what about the mediation, is that really an appropriate forum for hearing a case when in related proceedings the court has heard very serious allegations about the conduct of solicitors, who are officers of the court...? Surely these issues should be dealt with in open court, with the SRA in attendance as an interested party?
    Lots to chew on.
    Would be great if the Lawyer could now follow up its interview with Ian Austin....

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  • Mr Grumpy | 19-Apr-2012 10:13 am

    No doubt, this is all just some misfortunate misunderstanding. The happy news is that the metadata (or electronic fingerprints) of the document will show when it was first created, when and how it was subsequently altered and, in each case, by whom. This can then be cross-checked against the email trail.
    Tick, tick, tick...

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  • Anonymous | 19-Apr-2012 10:46 am

    But are the allegations actually true?

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  • Eric Longley | 19-Apr-2012 12:13 pm

    Who altered the minutes? Which partners in particular are alleged to have altered the minutes? Were the minutes actually altered or merely redacted. the former is probably more culpable than the latter although both involve an attempt to deceive ones colleagues and mark a level of dishonesty not tolerable in lawyers? These are questions of great public concern as many of the partners have gone on to other positions, some now hold public office, and if it is the case that particular partners altered the minutes the question arises as to thier fitness to hold public office and/or continue as solicitors. There must also be concern for those partners who were not party to altering the minutes and are being tarred by the same brush. It is in the interests of all concerned that the guilty parties be named.

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  • Anonymous | 19-Apr-2012 1:11 pm

    What exactly do you have to do before the SRA steps in? Torture kittens? Human sacrifice?

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  • Anonymous | 19-Apr-2012 1:21 pm

    Given that one of the former partners tarred with these allegations is president of the chamber of commerce in Sheffield it is high time that the person concerned step down until she clears her name - if that is possible.

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  • Anonymous | 19-Apr-2012 1:32 pm

    If someone - our former partners, BDO, Deloittes (the firm's and our own personal tax accountants), Dow Schofield Watts and any one else who entered into an engagement letter with Halliwells LLP and provided advice - would care to disclose to us the actual state of affairs and their actual advice to our late-lamented managing partners, it would be very helpful. Instead, we see allegations of equitable fraud playing out across a court room, are refused access to our papers and are threatened by BDO.

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  • Anonymous | 19-Apr-2012 1:36 pm

    Was not John Lord an equity partner at Halliwells until late 2010 ?

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