Nine former Halliwells partners have won a High Court battle to prevent the failed firm's liquidators from claiming alleged overpaid drawings or tax from them.

His Honour Judge Hodge QC, sitting as a judge of the High Court, ruled that the liquidators could not pursue claims for overdrawings of £125,000 each, since Steven Fennell, a fixed share partner, and eight others, negotiated a retirement deed before Halliwells' collapse that exempted them from facing claims relating to overdrawn current accounts and tax reserve accounts.

Fennell brought a case against the LLP, which was also used as a test case for the other eight partners. 

All nine left the firm shortly before it went into administration in 2010, moving to Kennedys to establish its Sheffield office. They all signed the same 

In a ruling from 22 July and published this week, HHJ Hodge said the terms of the deed were "clear" and that it was "inappropriate" for the liquidators to pursue the claim.

He added: "I am satisfied [...] that the terms of the retirement deed are clear. The LLP thereby waived and released any claim to pursue Mr. Fennell (and the other departing fixed share members) for any overpaid drawings and any overpaid tax [...]."

He said that Fennell's decision to leave Halliwells was "motivated by a variety of reasons, although a common factor with those others who left was dissatisfaction at the way in which the LLP was being managed, and what Kennedys had to offer".

The other partners that signed the retirement deed were: Judith Bloor, Cameron Clarke, Niall Edwards, David Fearon, Suzanne Liversidge, Helen Snowball, Heidi Swales and Gregor Woods.

Hodge also refused permission to appeal the decision on the grounds that an appeal would hold "any real prospect of success".

Irwin Mitchell acted for Fennell, instructing Jonathan Adkin QC of Serle Court, while Addleshaw Goddard represented Halliwells and its liquidators, instructing 11 Stone Buildings' Lexa Hilliard QC.

The ruling also showed that the Royal Bank of Scotland was a secured creditor with debt of £17.7m. It also said that there is an "estimated deficiency as regards of £203m".

Halliwells' principal assets are claims, or possible claims, against former members of the LLP including: claims for overdrawn current accounts and tax reserve accounts against 150 members; claims against 32 former members for recovery of a substantial reverse premium; and possible liquidators' claims against approximately 150 Members under the 1986 Insolvency Act.