Second cash call and St James's deal leave some liable for £500k
Halliwells partners look set to be asked to repay more than £2m in additional bank loans taken in 2010 as further details of the now-defunct firm's finances and partner liabilities emerge.
The firm conducted a voluntary cash call at the beginning of the year which saw 28 partners contribute a total of £2.3m, facilitated by professional practice loans (PPLs) taken out from The Co-operative Bank.
Partners put in varying amounts depending on whether they had received a payout on completion of the firm's new offices in Spinningfields. Those who received the windfall contributed £20,000 per equity point, while those who did not put in £10,000 per point.
The capital raising was at the request of the Royal Bank of Scotland (RBS) and came at the same time that the firm renegotiated £19.8m of loan facilities with the bank.
The cash injection came in addition to a mandatory capital raising conducted in 2008, when partners doubled what they had in the firm. At the time PPLs were taken out with Handelsbanken.
Partners will now be expected to pay back outstanding loans with The Co-op, Handelsbanken and RBS - with some partners liable for in excess of £500,000.
A spokesperson for The Co-op commented: "We can confirm that The Co-operative Bank does have professional practice loans in place with Halliwells partners. However, due to customer confidentiality we are unable to discuss specific details."
News of the additional cash call comes as it emerges that the former 40-strong Halliwells equity partnership is facing liabilities of up to £3m on its former Manchester premises at St James's Court.
The firm agreed to a rental contract with a break clause in 2013; however, it left the premises in 2007 when it relocated to Spinningfields. A number of partners including litigation partner Paul Thomas and former senior partner Alec Craig acted as guarantors for the 40,000 sq ft space.
Thomas has sent letters of demand to meet rent liabilities to former equity partners. The firm is hoping to negotiate a discount with the landlord, but it is likely partners will owe at least £25,000 each.
Thomas has also contacted the London Court of International Arbitration and is hoping that former Halliwells partners will agree to participate in an arbitration process. He has instructed John McGhee QC of Maitland Chambers to advise on the matter.
In addition to Thomas and Craig, former Halliwells partners Matt Wightman and Chris Phillips are also named as guarantors on the St James Court lease. However, both are disputing this, given they left the firm in 2009 under the assumption their role as guarantors would be passed onto existing members within the firm.
Phillips left to become a consultant at Keoghs, while Wightman became chief executive of HL Interactive, the bulk legal services business which demerged from Halliwells last year. The duo have instructed Walker Morris to advise.
Halliwells issued notice of intention to appoint administrators in June, concluding the break-up and sale of its business the following month.
http://www.legalweek.com/legal-week/news/1730588/former-halliwells-partners-hook-bank-loans
No comments:
Post a Comment