Liquidators will be asked to follow up ‘several’ lines of enquiry following analysis of the finances of the failed legal business Pure Business Group.
A final administrators report prepared by administrators Kroll Advisory, filed with Companies House, reveals that an ‘extensive’ investigation into the firm’s electronic records and bank statements is ongoing. This review is intended to identify any actions that could be taken against third parties to recover funds for creditors.
Such an investigation is always undertaken following the collapse of a business, but the report appears to suggest further activity may be required, stating: ‘The joint administrators have several lines of enquiry which will be followed up by the joint liquidators. At this stage the joint administrators cannot comment further, due to the sensitivity of the claims and at risk of prejudicing the investigation.’
In total, eight companies in the Liverpool-based Pure Business Group went into administration in November last year. The company, founded by former Huddersfield Town chairman Phil Hodgkinson, operated as part of the group and according to the directors was owed £11.2m from group entities when the business folded.
It emerged this week that 40 staff members dismissed when the company went into administration have been awarded 90 days’ redundancy pay by the employment tribunal. This was ordered by Employment Judge Ross, who stated that Pure Business Group Limited had failed to comply with the requirements of the Trade Union and Labour Relations (Consolidation) Act 1992.
In a separate judgment made in September, 18 former employees of Pure Legal Limited were issued with the same award for redundancy.
Whether any staff will receive any of the Pure Business Group award is still unclear. The administrators’ report states that employees’ arrears of wages and holiday pay are classed as primary preferential claims and total just £16,980, but sufficient funds are unlikely to be available to allow any distribution. There will also be nothing to pay £2.3m owed to HM Revenue & Customs, another preferential creditor.
Unsecured creditor claims come to around £3.7m and those owed money will receive nothing.
The only creditor who will be repaid in full is the lender Novitas, which will receive £1.85m from the work in progress that was transferred from Pure Legal Limited.
A coronavirus business interruption loan of £4.6m was made available to Pure Business Group in October 2020, and it is uncertain whether there will be enough money to allow a distribution to repay this.
The joint administrators have received approval of their revised fee estimate of £227,648 for fees, expenses and pre-administration costs. Total time costs during the administration were £198,262 based on 659 hours at an average hourly rate of £301. The administration has now concluded and the company has now been placed into compulsory liquidation.
The administration of Pure Legal Limited is expected to continue until at least January.
