TLT is to defend a group of 26 former Halliwells LLP fixed share partners in a continued dispute with the liquidator over liabilities related to the collapse of the Manchester-based law firm in 2012.
The dispute has been ongoing for five years with the liquidator seeking millions of pounds from former fixed share partners in repayment of drawings and tax payments, and a contribution to the firm's losses made in the run up to the firm's demise.
The claims are based on fixed share members' purported knowledge of the firm's insolvency prior to it entering a formal administration process; something fixed share members dispute. Indeed, the liquidators' own counsel suggested in Burns that certain full members had perpetrated a fraud on the LLP.
John Lord, commercial litigation partner at TLT and lead partner on the case said: "Having reviewed all the documents, there can be no doubt that full and frank disclosure of the firm's financial position and the reverse premium was not given to fixed share members. This is the corner stone of the fixed share members' defence. It will also present some difficulties for those who failed to comply with their duties to other members."
The case will also seek to get clarity on the specific claims against each fixed share member. Much of the delay to date in this case has centred on the Liquidator not responding to multiple pre-action disclosure requests for this information, with some requests having been outstanding for four years. Instead, the Liquidator has taken an approach that fails to recognise that different partners retired from the LLP at different times.
John Lord, commented: "This case rests on who knew what and when. The liquidator therefore has to accept that properly articulating his claims against each member based on the dates when that member retired from the LLP is absolutely essential."
TLT is also instructed to represent Stephen Fennel and eight other former Halliwells partners at the Court of Appeal in April. This follows the Liquidator's decision to appeal October's High Court ruling that the group could not be pursued for drawings and tax. The group of nine partners resigned from Halliwells to move to Kennedy's Sheffield office, six months before Halliwells filed a notice of its intention to appoint an administrator.