A ‘senior member’ of the management team at failed firm Axiom has provided a personal guarantee of £1m in outstanding monies owed as part of its Ince acquisition.
Axiom bought The Ince Group in April in a deal worth £2.2m, announcing at the time it had saved the much larger firm as part of a pre-pack administration arrangement.
But Axiom Ince subsequently went into administration itself after the Solicitors Regulation Authority intervened to shut it down. More than £60m of client monies is missing, former managing partner Pragnesh Modhwadia (pictured) was suspended from practising and the Serious Fraud Office has made seven arrests after raiding Axiom Ince offices.
An update on the Ince Group administration, prepared by insolvency specialists Quantuma, has revealed that of the £2.2m agreed to buy the business, £1m remains outstanding.
Given the administration of Axiom, the report states, further payment of the outstanding deferred money is ‘unlikely’. But a senior member of the management team of Axiom has provided a personal guarantee of the sale consideration. The joint administrators say they are ‘considering their options’ over this guarantee but gave no further details to avoid prejudicing any future actions.
Unsecured creditor claims that have been made across the Ince entities come to around £2.6m, with no payouts expected.
The joint administrators have carried out an initial review of the Ince entities’ affairs, interviewing directors and senior employees, speaking to the entities’ accountants, reviewing information from creditors and examining bank statements.
This initial assessment has revealed matters that the administrators ‘considered merited further investigation’. This remains ongoing but there is no further information at this stage to avoid prejudicing any potential future actions.
Creditors have approved a fees estimate which allows the joint administrators to draw up to £604,000 for their work on the LLP’s administration. Fees drawn so far come to £239,000. Legal costs and solicitor manager costs incurred by Pinsent Masons come to around £107,000.