Former Cobbetts leadership fined by SDT after admitting failings over firm's 2013 collapse
Six former board members at collapsed Manchester firm - four of who are now at DWF - fined after admitting to allegations
March 15, 2018 at 09:30 AM
4 minute read
Six ex-Cobbetts partners – including former managing partner Nick Carr and senior partner Stephen Benson – have been fined by the Solicitors Disciplinary Tribunal (SDT) after admitting to failings related to the firm's collapse in 2013.
All six have been fined between £12,500 and £17,500 and ordered to pay costs of as much as £35,000 for their roles in the demise of the Manchester firm, which at its pre-recession height had annual revenues of almost £60m.
Cobbetts – which was particularly hard hit by the financial crisis due to its reliance on real estate and banking work – was rescued out of administration by DWF in February 2013 through a pre-pack acquisition.
The six partners fined by the SDT were all board members at Cobbetts. Benson is now client strategy partner at DWF, while Carr was a partner at the firm until February 2016 when he became a consultant.
Of the other four, two others are still partners at DWF – Birmingham corporate head Mark Gibson and Manchester banking partner Paul Brown – while the other two, Richard Webb and Jeremy Green, are now consultants at TLT at Gateley respectively.
They were referred to the SDT last year over allegations that they "exhibited manifest incompetence and acted in breach" of Solicitors Regulation Authority (SRA) principles, that they allowed members drawings to exceed profits, and that they failed to have a proper contingency plan in place.
Carr and Brown admitted that they failed to deal with the SRA in an "open, timely and cooperative manner", while Carr also admitted that he failed to "accurately represent the position on the status of proposed funding" from Wesleyan Building Society, a short-term funder that the SDT ruling states Cobbetts was "overreliant" on.
Carr, Benson, Brown, Gibson and Webb also admitted that they "failed to behave in a way that maintains the trust the public places in solicitors, and in the provision of legal services", and all six admitted they "failed to run their business or carry out their roles in the business effectively and in accordance with proper governance and sound financial and risk management principles".
In mitigation, it was noted that the financial pressures on Cobbetts had placed "enormous demands" on them, and that they had been attempting to navigate the fallout from the financial crisis "at great personal toll to themselves" and under "immense" stress.
Both Carr and Benson lost their mothers in 2012, while the "burden of the events" meant that Brown was absent from the firm for several weeks in October that year due to a stress-induced illness.
The ruling states that the firm's administration has had a "devastating professional, financial and personal impact" on the group, who have "suffered severe personal and financial penalties".
Carr has been fined £17,500, while Benson, Brown and Webb will pay £15,001, with Gibson and Green paying £12,500. Gibson has been ordered to pay costs of £15,000, while the other five will pay £35,000.
All the lawyers apart from Gibson were represented by Timothy Dutton QC and Marianne Butler of Fountain Court Chambers and Weightmans solicitor Michelle Garlick, while Gibson represented himself.
The SDT also held separate proceedings with former Cobbetts finance director James Boyd and partnership tax accountant Stephen Thornton, who were referred to the SDT in May last year along with the other six lawyers. Boyd was fined £8,500 and ordered to pay costs of £10,000, while Thornton was fined £2,500 with £3,000 costs.
When the case was referred to the SDT last year, a spokesperson for the ex-Cobbetts partners said: "The SRA allegations, coming some four years after Cobbetts' sale, are misconceived and are fully, and strenuously, denied. The evidence demonstrates that we acted appropriately and with propriety throughout."
DWF was approached for comment.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllNew Frontiers: Gaillard Banifatemi Shelbaya Launches in Cairo and Abu Dhabi
4 minute readTravers Gives Holiday Bonus, Ropes & Gray Reduces Time Off Allowance
1 minute readJapan’s Mori Hamada Joins Funder LCM for $150M Credit Suisse Bonds Claim
Trending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250