RSM TENON has paid former RSM Bentley Jennison partners £1.2m as part of last year's renegotiated share and asset purchase agreement, following Tenon's acquisition of the firm in 2009.
According to Tenon's interim half-year results, it made payments to the former partners of RSM Bentley Jennison totalling about £1.2m for the six months ended 31 December 2012, out of a total of £9.9m owed.
Tenon's chief financial officer Adrian Gardner told Accountancy Age that the charge would now sit on "trade and other payables" on the balance sheet after changes to the payment terms were formalised in October - and the firm is likely to repay about a further £6.8m by September 2015.
The payments, initially based upon the results of the acquired business and other items, were agreed as part of the merger deal whereby Tenon bought the goodwill of acquired firm's partners. Under the acquisition agreement, deferred consideration was to be paid in three annual instalments.
Last year, Tenon renegotiated the payments so that they were no longer dependent upon results and would now be paid over an extended period to September 2015.
Speaking about the release of Tenon's half-year accounts, Gardner explained that renegotiations were made to change post-merger payments from earn-out calculations to a flat payment.
Tenon's operating exceptional charges for the six months to 31 December 2012 were £4.5m, reduced from £66.5m in 2011. These costs in 2012 related to professional indemnity expenses in the firm's Financial Management business of £1.9m and business reorganisation costs of £2.6m (being redundancy costs and professional fees). After exceptional costs, the loss for the period was £10.0m (2011 £70.6m).
For the purposes of transparency the firm said it would now report on the professional indemnity liabilities it had incurred and received where previously it had not outlined them. The firm claims that this change has no impact on the consolidated income statement.
"Professional indemnity provisions covers fees and incurred costs expected to settle legal claims outstanding at 31 December 2012. The classification adjustment of £11,984,000 relates to a change in presentation to show the gross receivable and the gross liability relating to professional indemnity claims, in accordance with IAS37," the statement said.
RSM also sought to recover some of the costs incurred following a Financial Services Authority fine of £700,000 for "significant failings" in its advice and sales processes to collapsed investment bank Lehman Brothers.
The firm revealed that it was engaged in an argument with its insurer over sharing out the costs of taking remedial action against the FSA, in its final results for the year ended 30 June 2012.
"A dispute arose between [the firm] and its insurers in the previous financial year as to the extent to which the sums claimed are covered under the programme, and insurers disagree between themselves as to how their liability for those sums should be shared," Tenon said in its interim accounts.
The case was referred and heard by an arbitration between 28 January and 1 February 2013 with no decision given at the time of the firm's publication of its accounts.
RSM Tenon claims that should the arbitration deem that some of the claim is not covered by the insurance, they do not expect it to have a "significant impact" on its financial position.
The firm also announced in the results that it has charged its affiliated company RSM Tenon Audit £11.2m for services such as use of facilities and personnel. The amount due from RSM Tenon Audit was £2.69m as at 31 December 2012 - no interest is charged on outstanding debt.
This article has been updated.
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