The Coventry office of BRI Business Recovery and Insolvency is pleased to report that it has recently completed the sale of a small solicitors practice in the West Midlands, via pre-pack administration; achieving a rescue of the practice, securing employees jobs and also ensuring the continued service to the practice's 400 or so clients.
This small, well-respected High Street practice with a loyal client following of mainly private clients, small local businesses and a significant number of charity clients, had, in common with many similar practices suffered from the recent economic downturn in particular in relation to domestic conveyancing work. Additionally it had lost a significant source of practice income as a consequence of low interest rates; losing approximately £40k per annum on funds invested.
Efforts made by the principals to replace the income and work being lost as a result of the prevailing economic situation were recently beginning to bear fruit, but the practice struggled to cope with historic debt and subsequently it became the subject of recovery proceedings by HM Revenue & Customs for outstanding taxes. In this instance it was not possible to negotiate an informal repayment arrangement and a strategy needed to be put in place to try to save the business and ensure the maximum possible return to creditors.
Following an independent valuation of the business and negotiations with the principals, consultation with the the Law Society and Solicitors' Regulation Authority to ensure that all of their requirements were being met and adhered to, a sale was completed shortly after the LLP was placed into administration. This was achieved without the need for any intervention by the Law Society thereby averting any potential problems for the practice clients had this been the case and additionally ensuring that the realisations were maximised for creditors as a whole.
It is an unfortunate sign of the times and noticeable that many professional practices are not immune to the effects of the recent recession. However, we are pleased to have been able to assist all of the parties involved to ensure the continuation of the business.