Categories:North West

Halliwells’ ex-managing partner: ‘I gave my life to that practice’

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  • Well, I can just about run to £3.00 to get the latest filings for 247 Comms Limited (5079956).

    According to the appointments report, the directors are, unsurprisingly, Bob Bion plus our old friends Ian Austin and Alec Craig. According to the report, Craig holds another 71 directorships, which will make interesting reading for someone at BDO.

    "You start to follow the money, and you don't know where it's gonna take you....."
    Its last annual accounts are made up to 30 April 2009, when Stephen Roe (remember him?) was also a director. There were shareholders funds of £127,735 and a P&L account of £91,348. It's a small company, so no annual profit and loss account, and no details of remuneration of directors. There's also no full audit, and no figure given for the turnover, which would be interesting reading.

    The last annual return is dated 12 April 2010. The directors are Bob Bion, Craig and Austin. The shareholders are Austin (82 shares), Craig (140), Stewart Harper (23), Stephen Hills (23), Bob Bion (300), David Morgan (47), Stephen Roe (117), Karen Spencer (23), Paul Thomas (175), J Whatnall (70).

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  • Who sanctioned the fees paid to 24/7? Was it the same people who qualified for a dividend? When were the fees paid, how much did the shareholders receive in dividends, when was the last payment made?
    Very interesting Mr Administrator

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  • Can you get company accounts under FOI?

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  • In reply to Anonymous 12 September 11:39am, the "minority to blame" are ALL of the equity partners of Halliwells. I love your comment "the Liverpool office succesfully [sic] managed to protect the majority of its staff including future trainees"- if this doesn't scream ex Halliwells equity partner trying to cover their back, then I don't know what does. AND IT GETS BETTER, " and all of those parties are extremely grateful to the people from the Halliwells Liverpool office for their help and support". By "people", you clearly mean the former equity partners (of which you are clearly one). Could you be any more obvious?! Like Ian Austin, you should just learn to keep your mouth shut. I can take one guess as to which former equity partner would be stupid enough to have made this comment and self righteous enough to be expecting some sort of praise.* One moment of clarity please, Hill Dickinson clearly wanted to expand its practice in Liverpool and this is the ONLY reason it took on Halliwells staff. You effectively left them all without work. Only a complete simpleton would buy your pathetic story. It's time to get off that high horse and accept that because of your greed the little ship that was Halliwells sunk good and proper.

    *A little brain teaser for everyone...former equity partner whose name rhymes with poo.

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  • The Administrator's report should indicate if substantial sums from the LLP have found their way over to 24/7?

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  • Remember HL Interative?! The place every property lawyer was told to send new residential conveyancing instructions to. I wonder whether that was all above board. Didn't some of the equity and FSM's of Halliwells run that side show.What was that all about? I remember it gave the pretence to clients that solicitors were doing the work, but in actual fact it was a group of untrained paralegals straight out of uni and being exploited with the carrot of a potential training contract.

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  • The administrator's first report is now out. I don't think they've been reading this website, or Legal Week, RollonFriday, or even talking to anyone in the pub in Manchester.

    There is NO MENTION of the reverse premium. The following is the administrators' account of the background to the insolvency:

    "By the end of the financial year to 30 April 2010 the LLP's management accounts demonstrated that the LLP was performing behind its financial budget. A key problem contributing to the LLP's financial position was a drop in turnover and billings due to the departure of a number of its members and staff. The decline in the LLP's profitability and restricted cash flow led the LLP to proceed in exploring options for an accelerated disposal of its business and assets in early 2010. Accordingly from early April 2010 a disposal process was instigated."

    Unless I've missed it, they don't seem to think that borrowing the best part of £20 million and giving it to the equity partners without telling the fixed share members had any bearing on the eventual insolvency, or is worth mentioning to trade creditors and those outside the legal profession who have lost money but might not read the legal press.

    The administrators' proposals say nothing about an investigation into the conduct of the management.

    But it does say that BDO have run up time costs of £524k and legal fees of £606k.

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  • Mr Justice Kitchin 30 July 2010 Re Halliwells LLP

    "Position of the creditors

    Mr Bannon has helpfully summarised the overall position. Halliwells was, prior to this application, loss making and those losses were projected to increase if it went into administration, significantly eroding asset value and having a knock-on effect on the funds available for distribution to all categories of creditors. The Administrators considered that the intended pre-packaged sales of the business represented the best deal available and would result in a higher level of recoveries for the secured, preferential and unsecured creditors than if Halliwells were allowed to proceed into a traded administration.

    Importantly, the Bank, as a secured creditor owed approximately £18 million, stated by letter dated 19 July 2010 that it was content that part of the monies received from three of the four purchasers should be used for the purpose of repaying the PPLs of relevant Transferring Members:

    "I have seen the draft sale agreements which are exhibited to your witness statement and acknowledge that it is intended that part of the monies to be received from three of the four purchasers of the business of Halliwells LLP are to be used for the purpose of repaying the PPLs of relevant transferring partners in the firm and this a key requirement of those three purchasers in entering into the proposed sale. On this basis and to enable the sale to proceed I confirm that the Bank is content for these monies to be treated and used in this way. The Bank acknowledges that the retention of sums and the establishment of the reserve trust to discharge the PPLs as described in the witness statements is driven out of necessity in order to maximise returns in the administration."
    Mr Bannon continues that the preferential creditors will be made up of employees of Halliwells who are not required by the purchasers. The estimated value of the preferential claims is between £68,000 and £100,000. The preferential creditors will be paid in full.

    Further, the unsecured creditors will receive the maximum statutory "prescribed part" payment of £600,000. This sum will be available for distribution to all unsecured creditors and will result in a dividend of £2.63p in the £. On the other hand, if the four sales did not proceed and the business entered administration as a whole, the number of preferential and unsecured creditors would greatly increase, thereby lowering the dividend for unsecured creditors to £1.60p in the £.

    Finally, Mr Bannon points out there will or may be Members (past or present) who are unsecured creditors of Halliwells, and who have not transferred as part of the four sales and who remain liable on their PPLs. However, he maintains, and I agree, that the payment of monies to satisfy the PPL liabilities of the Transferring Members under three of the four sales was a necessary evil to achieving those sales. The requirement was imposed by the purchasers and without it being complied with, the deals would have collapsed"

    Some partners were let off PPLs..............

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  • Ref Arthur Mee above. HLI demerged last year but HLLP kept a 10% stake and things stayed cosy. I wonder if the King Street (former James Chapman and now HLI's office sublet from HLLP) landlord has found out about the stitch up they pulled together there yet.

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  • No wonder the LLP was performing behind budget: Ian Austin's concept of a budget was a top-down target comprised of the sum of the number of fee earners multiplied by their hourly rate multiplied by the number of hours you hope they work in any one year and hope they cover firstly the fees of your nearest and dearest and secondly your drawings.

    The remarkable thing about 24/7 being a creditor to the LLP was that it hadn't been given a preference - probably something to do with 3 out of 4 offices refusal to stump up their sweetheart fees for this year.

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  • If the PPLs were paid off out of the disposals, where is the £700k that he says he lost? Is he saying his capital account was £700k over the PPL or is this an example of a particular form of financial accumen?

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  • Ian didn't transfer under the one of the 4 SPAs and therefore wasn't a protected person for PPL purposes. He had exited the building before then. Don't know if any other special deals were done with him and Alec as both were clearly not part of any of the deals being done on administration.

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  • According to the Claremont website http://www.claremontgi.com/office/case_studies/haliwells-manchester the furniture and a/v equipment at Spinngfields cost £2.6M. I wander how the rest of the £18M borrowed from RBS for fit-out costs was spent?

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  • Not looking too clever, is it?

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  • Looks like this will end up as a liquidation. I am not surprised as I think the Landlord, RBS and HMRC will all be very keen for a liquidator to investigate exactly how Mr Austin managed to manage the firm into an insolvent position over the course of a few short years.

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  • Ref - Anonymous | 17-Sep-2010 9:12 am
    The landlord would be very interested to learn about the 'stitch up' - are there any more details available?

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  • Bearing in mind the RBS, the Landlord and the FSM's do not appear to be in the creditors list this could easily go beyond £30M. Well done Ian, your comments do not sit at all well when considering the list of creditors but what was the name of the company who used to valet your car?

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  • Ref anon above re King Street. Have a look at Allied Dunbar v Homebase and then do some digging as to the precise nature of the transaction there with those circumstances in mind.

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  • This whole deal needs re-opening and re-examining. How could the administrator enable the Halliwells' old-guard (those who'd most benefitted from the reverse premium deal on Spinningfields) to waltz off into the sunset to their new firms with their capital intact (personal practice loans duly protected) whilst those partners who had the sense to resign in the previous 12 months but hadn't got their capital out, lost everything. At what point does this start to look like preferential and impartial treatment?

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  • I think the point here is that it was a preference which the Court sanctioned. The fear was that the partners would be made bankrupt which would involve them having to sell those houses they bought or built with the reverse premium money and we couldn't have that now could we?
    It is strange that the Administrator has not mentioned the reverse premium. Maybe he is saving up for when he becomes the liquidator?

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