BusinessBusiness RecoveryBDO asks former Halliwells partners to pay back drawings

BDO asks former Halliwells partners to pay back drawings

Administrators want the law firm's former partners to repay funds

A NUMBER of former Halliwells partners have been sent letters by the firm’s administrators trying to claw back drawings paid out in the months running up to the firm’s collapse, according to Accountancy Age’s sister publication Legal Week.

Administrators BDO contacted 211 former fixed-share and equity partners last month (23 June), with only 77 of these receiving letters stating that they do not face further action.

Legal Week estimates that at least 90 former equity or fixed-share partners could have been asked to repay drawings paid out in the months leading up to Halliwells’ insolvency on 20 July 2010, when the firm was not making a profit.

It is thought the former partners have been asked to repay around £10,000 at the bottom end, with some senior equity partners potentially having to repay a low six-figure sum in overdrawings.

In addition to the letter demanding repayment of overdrawings, other former partners have been told that tax overpaid on their behalf by Halliwells should be recovered for the administrators.

BDO said: “The administrators are now taking steps to recover amounts due to Halliwells LLP from former members. The administrators’ solicitors have written to a number of individual former members to seek recovery of sums due to the LLP.”

The news comes after Legal Week reported last month that a number of former Halliwells equity partners had been issued with a demand from BDO to repay around £21m related to a controversial ‘reverse premium’ ?property payout.

Equity partners distributed the payment, made in 2007 for the sale of a stake in the freehold of its Spinningfields office, among themselves – with the move later being criticised for contributing to the firm’s ?financial problems.

Commenting on the latest developments, one former partner said: “These recent letters have come as a bolt out of the blue for many of the fixed-share members, who are now mobilising to fight it and they will also be looking at those people who damaged the firm.”

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