A group of former Halliwells partners have been issued with a demand from the firm's administrators BDO to repay around £21m related to a controversial 'reverse premium' property payout.

The letters, which were received by a number of former partners this week, demand the repayment of money linked to a multimillion-pound payout awarded to around 40 former Halliwells equity partners.

The £24.5m payment was given to Halliwells' equity partners in 2007 when the firm sold a stake in the freehold of its new office in Spinningfields. The firm received the stake as part of the deal to move to the flagship site.

The majority of the so-called 'reverse premium' was distributed to equity partners of the firm, a move that has been criticised for contributing to the firm's later financial problems.

It is also understood that BDO is considering recovering some money in relation to drawings paid out in the months prior to the firm's insolvency last summer.

BDO issued a statement today (17 June): "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."

Repayment of the reverse premium would land some former partners with individual bills of hundreds of thousands of pounds.

One former partner said: "This could wipe out some of these partners, who may even have to declare bankruptcy."

The move comes after months of speculation that BDO would seek to recover the reverse premium. A report from BDO in February estimated that Halliwells owed unsecured creditors more than £190m, a figure which is largely made up of landlord and lease obligations.

The Royal Bank of Scotland is the law firm's largest secured creditor, with the bank at one point estimating that it may have to write off £15m due to the collapse.

Halliwells filed a notice of intention to appoint an administrator in June 2010, signaling a fire sale of the business in what became the largest law firm collapse ever in the UK. The firm's business was taken over by Hill Dickinson, Barlow Lyde & Gilbert, HBJ Gateley Wareing and Kennedys.