Business Recovery and Insolvency team recover £3.8m of debt in unprecedented legal assignment
Leading accountants and business advisors, Smith Cooper, have announced details of a ground-breaking assignment conducted by their business recovery and insolvency division.
The case in question concerned a solicitor’s firm which offered family law services primarily through legal aid funded work. The business initially entered Administration in November 2013, with Dean Nelson and Nick Lee being appointed Joint Liquidators in December 2014 and, together with Independent Consultant Jasvir Chopra, the engagement Team formulated a strategy to audit and manage the historic reconciliation and takeover of the Company’s client account.
The principle asset in the case comprised work in progress, generated on Legal Aid Agency (LAA) assignments. The opening balance of funds at the point of Liquidation owed to the LAA was in the region of £2.5m, with the former administrator previously estimating a net recovery of £350,000 to £400,000, after redemption of monies due to the LAA but before costs.
To date in excess of £3.8m has been recovered enabling payment in full of the debt owed to the LAA, with the surplus balance available for the benefit of creditors in the estate, before deducting the costs of the Liquidation, so far surpassing £1.3m.
Michael Roome, business recovery and insolvency partner at Smith Cooper, commented “We are unaware of another solicitor’s practice, primarily reliant upon legal aid funded work, where such a turnaround has been achieved, following the practice ceasing to trade and the files effectively becoming dormant.”
“The success of this case could not have been achieved without the efforts of Jasvir, owing to her extensive knowledge of both the SRA and LAA requirements. Jasvir’s considered and diligent approach in dealing with an assignment of this size should not be understated in this ground-breaking assignment, which may yet lead to a payment in full to unsecured creditors.”
Smith Cooper’s award-winning BR&I team are noted for their tailored, sincere and comprehensive approach to Insolvency. The team’s success is driven by their passion to go the extra mile for creditors and companies in distress during turbulent financial periods, which is evident in the success they have achieved, being named the Regional Insolvency Team of the Year at the highly regarded TRI awards.
The comprehensive case study, A solicitor’s practice in distress, can be downloaded here.