Creditors of closed Birmingham firm likely to receive nothing

Unsecured creditors owed money by a closed Birmingham firm are likely to receive no dividend, administrators have revealed.

Legal aid specialist Glaisyers LLP appointed administrators last summer as its remaining family and civil litigation work was transferred to other firms, Cartwright King and Davison’s Solicitors. The deal ensured that the majority of jobs were saved.

The first administrators’ report from Opus Restructuring LLP suggested a small payout may be found for unsecured creditors, as well as 15p in the pound for secured creditors. In the latest report published last week, that forecast has now been adjusted to nil for secondary preferential creditors and unsecured creditors, and ‘uncertain’ for secured creditors.

The administrators have been able to recoup around £218,000 from work in progress and cash reserves but the administration has already cost almost £95,000 and further fees will be incurred.

The latest report states that when administrators were appointed, a total of £491,000 was due to director David Simon and another individual named Allison Smith. A shortfall in repayment of this debt is expected.

One party unlikely to receive anything is HM Revenue & Customs, whose final claim was for £139,000. Unsecured creditors are owed a total of £681,000.

The previous administrators’ report had stated that the firm was principally a legal aid care practice, with childcare work accounting for 85% of its legal aid caseload. It had two partners along with Wake Green Limited, a corporate partner of which David Simon is the sole director and owners.

The firm had been loss-making for some time, with financial support to prop up the business from Simon and entities owned by him. Since August 2022, he estimated he had invested around £475,000 in the business.

Weekly payments from the Legal Aid Agency were insufficient to meet outgoings and cashflow was ‘consistently stretched’, the firm regularly required to rely on its bank overdraft and a £120,000 loan which were both guaranteed by Simon.

The firm employed 11 solicitors and moved premises twice in recent years to cut costs, but the reduction in rent was not enough to return the business to making a profit.

Glaisyers LLP is not related in any way to north west firm Glaisyers ETL.