Firms Continue To Amass Fees From Retail Collapses As High Street Struggles
Two national firms are among those sharing millions of pounds of legal fees for their advice on administrations of high street chains.
April 16, 2019 at 05:22 AM
2 minute read
Firms including Addleshaw Goddard and Pinsent Masons are continuing to amass fees from recent corporate collapses as the retail sector struggles, recent reports show.
The collapse of high street stalwarts HMV and Patisserie Valerie as well as that of energy broker Utilitywise have generated £2.13 million in legal fees, according to recent administrators reports.
Among the beneficiaries of the latest fee reports have been Howard Kennedy and Addleshaw Goddard, which are set to pick up a share of more than £1 million worth of legal and agent fees for their work on HMV, according to a document released by administrators KPMG in February.
A report on the administration of Utilitywise from U.S.-based FTI Consulting on 5 April said Pinsent Masons is expected to receive around £200,000 in fees.
The administration of Toys 'R' Us, meanwhile, will see further fees of £872,800 be paid out among legal advisers that include Kirkland & Ellis, Stephenson Harwood and DLA Piper.
Separately, Gateley has picked up £11,180 in pre-administration legal costs associated with Patisserie Valerie "in connection with negotiating funding agreements, reviewing the lease portfolio and dealing with appointment related formalities", according to a document from administrators KPMG.
Legal fees for work on House of Fraser, Toys 'R' Us, BHS, Poundworld and Maplin hit £6.5 million two months ago.
A City restructuring partner said senior restructuring partners were in high demand from acquisitive U.S. firms as a result of the activity on the high street. He explained: "It's unsurprising given that everyone thinks the economy is going to throw up more opportunities for restructuring soon. We are a counter-cyclical group, restructuring lawyers, and we're moving into a more lucrative area for our firms."
To date, legal fees paid out for the administration of House of Fraser total almost £450,000, according to a document by administrators EY from February.
Total legal costs for Maplin's administration from February 2018 until February 2019 stand at £100,255. Administrators PwC released the figures in their second creditors report on March 22.
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