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Doomed firm ‘over-valued’ WIP by £15m before collapse

Dec 3, 2020News

Based on current estimates, nothing will be left for distribution to unsecured creditors, who are owed £7.4m in total.

Yorkshire firm went bust a year after auditors wrote down 70% of its anticipated £22m income, documents have revealed.

Administrators for personal injury specialist Heptonstalls, which employed more than 100 people, said in an update published with Companies House that independent auditors were brought in after lenders to the firm raised the alarm at accounts showing a significant deterioration in projected forecasts. Work in progress was found to be valued less than the directors envisaged.

A year after this assessment, administrator Duff & Phelps was appointed and the business and assets sold to Dominic Weir and Shane Hensman, trading as HH legal, with 106 staff transferred. The buyers paid £100,000 on completion and agreed to pay 25% of the net recovered profit and success fees when personal injury claims settle in future. The directors also agreed to continue progressing an ongoing dispute with ATE insurers and if successful will return 20% of the recovered sums after costs.

Read full article in https://www.lawgazette.co.uk/practice/doomed-firm-over-valued-wip-by-15m-before-collapse/5106648.article

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