KPMG ADMINISTRATORS have arranged the pre-pack sale of law firm Cobbetts to rival DWF.
Mark Firmin, Brian Green and Howard Smith, partners at KPMG, were appointed joint-administrators to the collapsed firm.
A pre-pack is where the sale of a business is arranged prior to it entering administration and is sold immediately after entering into the process when administrators are appointed.
Firmin (pictured) said: "In the current economic climate we are delighted to have brokered a deal that saves more than 400 jobs. We have moved swiftly, working in collaboration with a number of stakeholders including the Solicitors Regulation Authority. This is a strong result and an important step forward for DWF in the market."
Cobbetts had 419 staff, of which 72 were partners, based across offices in Manchester, Leeds, Birmingham and London. The merged firm will now have an employee base of nearly 2,500.
However, Andrew Bennett and his finance and litigation team are not included in the deal as it creates a commercial conflict due to DWF's recent merger with Fishburns. That team will join Leeds-based firm Walker Morris.
The future of Cobbetts' debt recovery arm Incasso remains unclear as it is not part of the pre-pack deal. In 2002, Cobbetts merged with Leeds-based Read Hind Stewart which later became Incasso and is reported to employ about 70 people.
A statement from DWF said: "DWF is supporting those involved including assisting in the day-to-day management of client affairs for the immediate future, while the long term direction of the business can be determined."
The deal comes on the back of failed merger talks between the two firms last year. The proposed tie-up was called off last January, with a joint statement from the firms citing "uncertainty in market conditions".
Cobbetts has suffered in the wake of the financial crisis, and has seen revenues fall almost 25% from a pre-recession high of £59.3m to £45.2m last year. The Manchester-based firm confirmed on 30 January that it was aiming to sell off its business and assets as soon as possible.
Deloitte's Manchester office provided tax, accounting, insolvency and strategic advice to DWF.
Bill Dawson, restructuring services partner at Deloitte, said: "This has been a difficult time for Cobbetts, a highly regarded national law firm with a proud history. However, we are pleased to have helped achieve a transaction which gives partners, employees and other stakeholders the best outcome in the circumstances and should help to ensure minimal disruption of service to clients of Cobbetts."
You may also like
If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.
In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.