The Manchester law firm, Cobbetts, has filed a notice of intention to appoint administrators according to the TheBusinessDesk.com. This move is to protect the company until a buyer is hopefully found.
Cobbetts has nearly 500 staff and offices in Birmingham, Leeds and London. Staff were informed of the administration this morning.
Cobbetts reported a fee income of £45.2m in the year to the end of April 2012 and had pre tax profits of £9.9m but it had debts of more than £10m. As Cobbetts is an LLP, this profit is before the designated members have taken drawings.
The firm blamed continued tough trading in the professional services sector for its downfall.
The firm said: “Having regard to the difficult trading conditions in the professional services sector we have reluctantly concluded that the appropriate course at this time is for the firm to obtain the protection of an interim statutory moratorium to enable a sale of the business and assets of the firm to be concluded in a short time frame."
“We are also working closely with our regulator, the SRA. with all stakeholders and our professional advisers to achieve the best outcome for creditors, clients, employees and members."
This collapse is the largest since Halliwells in 2010 which was acquired in a pre-pack administration by several firms including Birmingham-based Gateley, Hill Dickinson and Barlow Lyde & Gilbert.
This may be a sign that the banks are getting more ready to call in their debts. A number of companies have collapsed in the last week or two.
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