Penningtons is em-broiled in a battle raging in a Manchester court, which could see the firm forced to pay millions of pounds in damages as a result of a company that was wrongly put into liquidation. The case, OBG v Allan & Stevenson, relates to utilities company OBG, which was put into receivership and then voluntary liquidation in 1992. The claimants, former directors of OBG and the liquidators, Begbies Traynor, are seeking around £18m in damages from the receivers, two partners from accountants Smith & Williamson. Penningtons, which ad-vised the receivers and the petitioning creditor, US utilities company Raymond Centriline, has right of attendance at the trial because the receivers are, in turn, bringing an action against the firm. The latter action will decide the proportion of damages to be paid by Penningtons, which could be up to 100 per cent of the total. At the first stage of the trial in January 2001, Judge Maddocks ruled that the appointment of the receivers was invalid, and an in- terim damages payment of £766,000 was made. In the judgment he noted that, although Penningtons initially denied that it had been negligent, at the trial it changed its position. "Penningtons sought permission to amend its de-fence, both to admit (or at least not to contest) the invalidity of the appointments, and to admit negligence," the judgment states. The Penningtons partner who advised on the initial matter is no longer with the firm and no longer a practising solicitor. The current hearing is on quantum and sees the parties arguing over the exact financial state of the company when the appointments were made. Reynolds Porter Cham-berlain solicitor Jonathan Wyles, acting for Penning-tons, declined to comment, except to say that both the firm and Smith & William-son strongly denied the position taken by the claimants. Smith and Williamson declined to comment.