Cobbetts’ bank debt deferred pending legal action

Cobbetts’ administrator KPMG has postponed a final distribution of £336,687 to Lloyds Bank after receiving notice of legal action relating to the sum by four former partners.

KPMG’s final report said it intended to make the final distribution to the bank before the end of the administration but now has to hand investigation of the outstanding matter to the joint liquidators.

According to the report Cobbetts owned Lloyds £7.2m at the date that the administrators were appointed, of which £2.3m was secured.

The administration of Cobbetts, which went into administration in February 2013, was scheduled to automatically end on 5 February 2014 (6 February 2013). 

However, KPMG applied to extend the administration period by six months in January “to faciliate realisation of the remaining assets of the LLP and to carry out an orderly exit from the administration” (22 January 2014).

The final filing confirms the firm’s sale consideration of £3.9m paid by DWF in relation to debtors and work-in-progress. It also states that the administrators secured a insurance refund of £117,930 from the firm’s professional indemnity insurers Locktons.

The administrator has also been in ongoing discussions with finance-company Wesleyan over the repayment of the premium which it argues it was owed having loaned it to the firm.

A conclusion has been met, the details of which will be finalised by the joint liquidators.

KPMG reported incurred time costs of £85,633 between 7 June and 31 July, equating to 267 hours at an average rate of £329 per hour.

Over the total period of KPMG’s appointment it has incurred time costs of £1.2m, representing 3,493 hours at a average rate of £335 per hour.