Unsecured creditors of a collapsed London firm - including staff owed redundancy and notice pay - are unlikely to recover a penny, it has been revealed.
An administrator’s progress report for St John Law Limited, published this week with Companies House (pictured), show the firm owed £658,482 in unsecured debts to 11 creditors.
The St Bride Street practice, which specialised in litigation and specifically legal advice for Irish developers affected by the collapse of the Irish economy, entered administration last October. It had no connection with St John Legal, which is a trading name of London firm City Law Firm Limited.
A statement of administrator’s proposals published by the administrator Quantuma LLP in December showed the firm owed almost £20,000 in unpaid wages and holiday pay and around £135,000 for redundancy and notice pay. The second debt was classified as ‘unsecured’.
Other unsecured creditors included HM Revenue & Customs (owed almost £600,000) and trade creditors, who are owed around ££82,000.
Today’s update states that based on the information presently available, it is expected there is ‘unlikely to be distribution to unsecured creditors’.
The company’s book debts at the time of administration were £226,537. Quantuma said that given the ‘significant costs and uncertainty’ associated with pursuing these debts, agreed settlements have been made with two debtors who will pay almost £73,000 in total.
Administrators have collected book debts of £32,000 and, while further recovery is expected, ‘numerous queries’ have been raised in respect of outstanding debts.
December’s report explained that the firm’s work depended on it acting on a deferred fee basis, with recovery of costs from the losing party taking several months or years.
‘The uncertain timing and quantum of this work impacted on the company’s cashflow,’ said the report. ‘A number of matters proved not to be successful, the result being that vast amounts of costs were written off.’
The firm had been involved in two major defended High Court disputes and at the time the petition to wind up was made last August it was involved in a trial lasting three weeks with costs and work in progress of £1m.
The administrators have said their intention is to exit the administration by way of dissolution if there are no funds to distribute to unsecured creditors. This is likely to take effect in 14 days.
Today’s report states that the administrators will charge remuneration of £35,500, with costs coming to almost £20,000. National firm Pinsent Masons has also incurred £57,000 in charges for its role in the administration.