News - North West

Law firm optimistic for future after pre-pack deal

A law firm in Stockport, which entered administration after being unable to secure professional indemnity insurance, has been sold in a pre-pack deal.

One of the directors of the purchaser has told Insider his new company would endeavour to make a success of the firm.

Solis Law Ltd has acquired business and assets of Cheadle-based Lealaw Ltd after administrators from Leonard Curtis were called in on 23 December 2013.

Lealaw, which traded as Lea and Company, failed after it was forced to close by the Solicitors Regulation Authority (SRA) when it was unable to secure professional indemnity insurance cover for 2014.

This was as a result of a former domestic conveyancer being investigated in 2010 regarding negligence in certain transactions.

A report from Leonard Curtis has revealed that the assets were sold to Solis Law Ltd for £83,000, a connected business with shared directors.

Alan Berry of Solis Law told Insider: "Two of the former directors have endeavoured to buy certain of the assets with a view to work for the benefit of certain of the former clients of Lea and Company. We're endeavouring to make a success of it and hopefully things will prosper in the future."

The business has taken on a "select group" of Lea and Company's clients, Berry added.

"We do not act for all the clients of the former practice," he said. "We concentrate on company work and commercial property work so we have taken those clients forwards and everything else has had to be taken elsewhere by other people."

Lea and Company originally began trading in 1991 and was founded by Stephen Lea to deal with music and entertainment work. A domestic conveyancer and ligitator were appointed in 1993 and Alan Berry joined in 1998 to develop a commercial and commercial property department.

It traded profitability for a number of years, the administrators added.

Lealaw Ltd had one secured creditor, Natwest. The bank is estimated to be owed £31,950 and is set to be repaid in full.

All of the company's employees transferred over to the purchaser but there is expected to be about £5,000 owed to the staff, as preferential creditors, for wage arrears.

But unsecured creditors are "unlikely" to receive a distribution, the administrators said.

Although the full unsecured claims are not yet known, it is estimated that about £70,000 is owed to HM Revenue & Customs.

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