Former Halliwells partners to repay £20.4m Spinningfields windfall
Halliwells’ administrator BDO is calling on former partners to repay the cash they pocketed in a reverse premium deal with the failed firm’s Manchester landlord.
Halliwells
On 13 June BDO sent a letter to 32 former Halliwells equity partners who between them divided £20.4m, a windfall from a deal struck with Manchester office landlord Allied London. The letter asks the partners to repay the premium, plus interest and costs.
A statement from a BDO spokesperson said: “BDO joint administrators Dermot Power and Shay Bannon can confirm that a letter dated 13 June was sent to the partners who received a premium from the entry of Halliwells into a number of leases of different areas of a building known as 3 Hardman Square. The letter requested repayment of those premiums from the individuals concerned, plus interest and costs.”
Of the 32 partners who received the letter 12 are now at Gateley’s Manchester office.
“It’s something that we’re taking very seriously,” said Charles Glaskie, head of corporate at Gateley and one of the partners to receive the letter. “We’ll look at it sensibly and then revert to the guys [at BDO].”
In 2005 Halliwells took on a 25-year lease on an office at 3 Hardman Square, in Manchester’s commercial development Spinningfields. As an incentive for Halliwells to take the lease, the deal allowed the firm to receive part of the freehold, which it then sold to Allied London in 2007.
Halliwells received £24.5m for the deal, £20.4m of which was distributed among the firm’s equity partners, with the rest put back into the business.
“It’s taken a while, but I’m not surprised that [BDO] have finally got round to asking for the money,” said one source close to the failed firm. “The money was an asset that [the administrators] were deprived of because the partners just took it for themselves.”
When Halliwells filed notice of its intention to appoint an administrator on 24 June 2010 only 15 of the group of equity partners who received a portion of the reverse premium were still at the firm: Ian Austin, Mike Ball, Andrew Buchanan, Alec Craig, Charles Glaskie, Rebecca Grisewood, Mark Halliwell, Stephen Hills, Jonathan Moakes, Susan Molloy, Andrew Piatt, Paul Rose, Karen Spencer, Paul Thomas, Rod Waldie.
All the above bar Ian Austin, Alec Craig and Paul Thomas are now at Gateley.
For more see:
Halliwells’ client money fiasco haunts new owners
Axed Halliwells lawyer’s Gateley action founders
Halliwells, the aftermath: HBJ and failed firm face court
Halliwells’ administrators seek funds to cover £200m of debts
Halliwells’ ex-managing partner: ’I gave my life to that practice’
Readers' comments (9)
Anonymous | 17-Jun-2011 4:20 pm
At last...a sensible message to the profession!
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Marx | 17-Jun-2011 4:22 pm
WOW, what a surprise!!! Yes, that's sarcasm. Surely they must have been expecting this for quite sometime. Let's hope they've all been saving up....
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Anonymous | 17-Jun-2011 4:46 pm
Anyone want to speculate how this might impact Gateleys/the sub-LLP/the partners in the sub-LLP? Or Heatons?
Looks like nobody who went to BLG or Hill Dicks was part of the 'inner circle' - guess they got the last laugh.
But the most important question of all - where is Alec Craig these days?
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Anonymous | 17-Jun-2011 4:58 pm
I bet Gateleys hourly rates have been increased this week!
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spinning your way out of this one | 17-Jun-2011 5:24 pm
Alec Craig was seen at Ascot this week. Apparently he bumped into Dermot Power from BDO and they shared a joke over a glass of bubbly. True story!
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Halliwells watcher | 17-Jun-2011 5:31 pm
If those partners who took the reverse premium thought after Halliwells went belly-up that they'd get away with keeping it then they're even more dumb than I thought. They must have been expecting this.
Is this going to be a Hammonds-litigation scenario?
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Anonymous | 17-Jun-2011 5:39 pm
According to the Heatons website, Austin has "a determined approach to resolving commercial disputes but equally recognises the need to consider alternatives to litigation and arbitration and has considerable experience of mediation."
So will he be opting to mediate his way out of this one?
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Anonymous | 17-Jun-2011 6:22 pm
Weren't Halliwells a Limited Liability Partnership? If so then how will the administrator be able to recover the money from the partners?
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Duh | 18-Jun-2011 1:16 am
Because the claim is by the LLP (acting by BDO) against the partners personally for (presumably) breach of duty in agreeing to the transaction for their own profit.
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