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.
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’