The extent of the fallout from the collapse of law firm network Kingly Solicitors Limited has started to emerge, with creditors set to lose millions from the shut-down business.
The national firm, which has acquired a number of High Street practices across the country since 2016, was effectively closed by a Solicitors Regulation Authority intervention in August.
Companies House records published this week show the business was placed into voluntary liquidation at the end of September.
A subsequent statement of Kingly’s affairs reveals that unsecured creditors are collectively owed almost £17m but stand to recover just a fraction of that sum.
The business has £1.3m in fixed assets and £1.75m in floating assets. Any income from work in progress at the time of intervention is still uncertain.
Former employees classed as preferential creditors are to be paid £128,000 in redundancy payments, outstanding wages and holiday pay. After repayments to preferential and secured creditors, an estimated £327,000 is available to pay the £17m owed to unsecured creditors.
The list of unsecured creditors includes £1m owed to trade creditors – including several legal businesses – with around £400,000 to HM Revenue & Customs. The biggest liability by far is the £11m allocated as a contingency for SRA compensation. This sum has been allowed for potential claims by the regulator for possible compensation rising from client account breaches.
A further £1m is listed as a contingency in respect of the liabilities of east London firm Wiseman Lee LLP. The joint liquidators are reviewing the information in relation to the purchase of this business and will report on this in due course.
By the time of its closure, Kingly had 16 offices across the country after embarking on a rapid period of consolidation. It changed its name last year from RH Legal. Most of the firms acquired continued to trade under their existing names: they included Giffen Couch & Archer Solicitors in Bedfordshire, Milton Keynes firm Austin Ray, London practice Hughmans Solicitors and north east firm Coles Solicitors.
An SRA intervention of a firm the size of Kingly is almost unprecedented. According to a statement by the regulator in August, the firm had not complied with one or more of the terms of its licence.
The SRA also intervened in the practices of Kingly’s three directors, Champika Ratnayake, Simon Hutcheson and Simon Crosby Peacock (who was admitted as a solicitor in 1986). It added that there ‘is reason to suspect dishonesty’ by Nurul Miah as a manager of the firm in connection with the firm’s business; or any trust of which the firm is or was a trustee; or any trust of which Miah is or was a trustee in his capacity as a manager.