Ex-Cobbetts partners face £100k penalty to break two-year DWF lock-in
Legacy Cobbetts partners could face a financial penalty of up to £100,000 if they choose to break the two-year lock-in set out in the failed firm's pre-pack purchase agreement with DWF. The former Cobbetts partners, who had their capital contributions protected following the Manchester firm's collapse earlier this year, all joined DWF as fixed-share partners as part of the £3.8m distressed purchase. In order to protect its investment, DWF imposed a two-year lock-in on the transferring partners and it is now understood that this includes a release clause penalty of £100,000 for any partners trying to leave during the first year and £70,000 for any trying to leave in the second.
May 16, 2013 at 07:00 PM
2 minute read
Legacy Cobbetts partners could face a financial penalty of up to £100,000 if they choose to break the two-year lock-in set out in the failed firm's pre-pack purchase agreement with DWF.
The former Cobbetts partners, who had their capital contributions protected following the Manchester firm's collapse earlier this year, all joined DWF as fixed-share partners as part of the £3.8m distressed purchase.
In order to protect its investment, DWF imposed a two-year lock-in on the transferring partners and it is now understood that this includes a release clause penalty of £100,000 for any partners trying to leave during the first year and £70,000 for any trying to leave in the second.
A total of 72 partners joined DWF following the purchase of Cobbetts; however, roughly 15% have left already, including the immediate transfer of a 27-strong finance litigation team led by partners Andrew Bennett and Ciaran Corry to Walker Morris.
Other partners to have moved already include former Manchester head Paul Johnson, who recently joined Linder Myers, and disputes partner Mark Whittell, who is now at Gunnercooke.
Last month, former Cobbetts partner Andrew Wright was appointed to the failed firm's creditors' committee, as questions over money allegedly owed to ex-partners began to emerge in the wake of the firm's demise.
Several former partners are considering legal action, claiming they still had money invested in the firm at the time of its collapse and have been left out of pocket. Only those who were partners at the time of the collapse had their capital contributions protected.
Separately, DWF this week put 12 secretaries and fee-earners at risk of redundancy across its Glasgow and Edinburgh offices. The firm said a number of roles had been duplicated following its merger with Biggart Baillie last July.
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