Ex-Cobbetts partners to face claims as KPMG appoints PwC for final wind-down
A number of former Cobbetts partners who moved to DWF in last year's pre-pack administration are to face payment claims in the final wind-down of the failed firm, Legal Week has learned.
July 11, 2014 at 07:28 AM
2 minute read
A number of former Cobbetts partners who moved to DWF in last year's pre-pack administration are to face payment claims in the final wind-down of the firm, Legal Week has learned.
The funds – amounting to hundreds of thousands of pounds – are understood to be held by certain partners who allegedly took money out of Cobbetts' LLP prior to the collapse of the business.
The news comes as it emerged that administrator KPMG has recommended PwC to take charge of Cobbetts' liquidation.
PwC director Lyn Vardey today said he and partner Toby Underwood had accepted the proposal, and that the pair would meet KPMG on Monday (14 July) to finalise the details of the liquidation.
On 20 June, KPMG wrote to creditors suggesting their claims might be "enhanced" if an alternative liquidator were appointed to handle the wind-down of Cobbetts.
Shortly after that letter, the administrators confirmed to Legal Week that it expected to place Cobbetts into liquidation by the end of July.
While an administration, rather than a straight liquidation, makes it easier to establish details of a business' assets, liquidators have greater powers than administrators to pursue claims against individuals.
PwC did not comment on which former partners are likely to be pursued, or the amounts each might owe.
Separately, KPMG's third progress report on the Cobbetts administration shows the firm has incurred total time costs of £1,084,650 between 6 February 2013 and 6 June 2014.
The report also shows KPMG has successfully collected £9.78m from DWF for work in progress which preceded Cobbetts' collapse.
A clause in the administration agreement means that KPMG is entitled to 25% of all realisations over £9.4m, meaning that the administrators are entitled to a further £95,000.
Cobbetts entered administration in February 2013 after its business failed to recover from the impact of the financial crisis, and having failed to pay off expensive leases on its offices taken out in 2006 and 2007.
Its pre-pack takeover by DWF saw the firm pay a guaranteed £3.9m for Cobbetts' assets and work in progress.
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