PracticeAccounting Firms£18m damages threat after eight-year battle

£18m damages threat after eight-year battle

A legal battle lasting nearly eight years over an allegedly invalid receivership appointment could see Smith and Williamson partners Iain Allan and Michael Stevenson pay out £18m in damages by the end of the year.

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In a hearing currently underway at a High Court in Manchester, Judge Maddocks is hearing statements from the original plaintiffs, Begbies Traynor and expert witnesses, including two each from RSM Robson Rhodes and Baker Tilly.

The final damages figure will depend on whether the judge finds the receivership could have been handled differently and as a result produced a better return for creditors, or if the company could have survived.

The saga began in 1992 when Allan and Stevenson were appointed receivers to utilities contracting company OBG by US-based company Centriline, under charges given to its bank, Royal Bank of Scotland. Ten days later, Begbies became liquidators of the company and three years later in 1995, lodged a claim at the High Court for £18m against the receivers.

The judge found in favour of Begbies in 2001. The case will continue until October when the judge will hear the final summations from both sides. A ruling on damages is likely by the end of the year.

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