Former partners at defunct law firm Halliwells have been issued with details of new potential claims, after the firm's joint administrators at BDO sent out letters detailing possible action they may bring.

BDO administrator Dermot Power sent a letter last week (26 October), warning the ex-partners that they may face proceedings relating to a number of claims including repayment of overdrawings, unpaid capital contributions and breach of duty.

The letter, which has already been dubbed the 'letter of death' by ex-partners, said BDO is investigating a number of issues including the collapsed firm's drawings policy, the timing and amount of capital payments made by members of the limited liability partnership (LLP) and decisions taken by the board in relation to refinancing, potential mergers and ongoing trading.

In the letter, joint administrator Power says: "I would not ordinarily write to you at this stage… I consider that the joint administrators' duty to the creditors of the LLP requires the joint administrators to put you on formal notice of the progress of their investigations and the likely nature of the claims that will be made against the members."

BDO will send out further detailed letters before action relating to any claims they opt to bring against individual partners, with the nature of the claims depending on the position of the individual member, whether they remained a member at the date of administration, their involvement in the running of the business and their knowledge of the firm's financial position.

The letter also stipulates that the administrators do not think any settlement should be reached during an ongoing mediation between the members and the landlord of its old Manchester premises at St James's Court, with regard to £4m in outstanding rent liabilities owed on the lease.

The letter states: "As for members to pay monies to one creditor would be to prefer that creditor… any payments in that regard would need to be investigated by the administrators and subsequent liquidators, and might have to be set aside, and this would involve the administrators/liquidators bankrupting the member concerned."