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.
Readers' comments (22)
Anonymous | 19-Apr-2012 3:13 pm
Yes he was an equity partner, although not sure when he left.
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Anonymous | 19-Apr-2012 3:27 pm
Ian Austin was managing partner at the time so I guess you start the investigation by speaking to him
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Boy Wonder | 19-Apr-2012 4:39 pm
I wonder what the senior partners of Gateley, Clyde & Co and Hill Dicks make this accusation.... and I gather that other serious allegations were made in court yesterday... no doubt the Lawyer will confirm...
I wonder what those former Halliwells staff, salaried and fixed share partners who are still working with Halliwells equity partners make of all this.....
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It was all Ian's fault | 19-Apr-2012 9:55 pm
@ Boy Wonder, 4.39pm
Don't forget the other firms where the Spinningfields defendants now practice. How about a comment from Kennedys on their Sheffield office head and former businesswoman of the year?
Would that sort of business acumen get past week 1 of The Apprentice?
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prawn balls | 20-Apr-2012 7:15 am
what i want to know is what was the FD doing all this time, he's supposed to control the finances!
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Anonymous | 20-Apr-2012 9:01 am
I am appalled by this case, it brings both the profession and BDO into complete disrepute if so much as a sniff of this is true. What particularly upsets solicitors from other firms in Sheffield is Ms Liversidge continuing to represent the Chamber of Commerce in the city. It is about time she was asked to step down.
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@prawn balls | 20-Apr-2012 1:22 pm
I recall the FD was alleged in a previous article of receiving a substantial sum from the reverse premium? £500k or something?
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The Ghost of St James (Court) | 20-Apr-2012 4:25 pm
There is something of the African Savannah about this - just when you thought the carcas of the wilderbeast was still and lifeless, a lion-chewed ear,a maggot-infested spleen or a cockroach-inhabited scrotum twitches -please, please, please, let this saga conclude so that we can move onto "Halliwells the Movie"
The Ghost of St James (Court)
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Anonymous | 20-Apr-2012 4:56 pm
The SRA must be getting twitchy about this. It can't be long before someone starts making comparisons between this matter, and what would have happened if it had been some little BME practice.
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Anonymous | 20-Apr-2012 10:03 pm
This was not a two partner firm and the ex partners have loadsamoney. Consequently, do not expect any actions by the SRA. They can't attack people who might make it to the ECHR before being bankrupted.
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