Law firm Manches LLP has undergone a change of fortune following a pre-pack insolvency process and acquisition by Penningtons Solicitors LLP.
The move was accomplished by PwC administrators Zelf Hussain, David Baxendale and Stuart Maddison, who were appointed to Manches LLP and Manches Services Limited on 14 October 2013.
The firm, which had 46 partners and had a turnover of £27m, had been facing considerable financial difficulties resulting from trading losses and lack of liquidity.
Hussain said the deal would offer security to Manches’ 265 employees and its clients, which include high net worth individuals and growing mid-market companies.
“The last few weeks have seen an intensive period of activity as we worked with Manches, Penningtons and the Solicitors Regulation Authority (“SRA”) to find a solution.”
Glen Babcock, law firms restructuring specialist and partner at PwC added:
“This latest news on Manches reflects the financial issues facing the legal sector. Our most recent law firms survey found that the appropriate funding levels for firms, together with effective financial management has risen to the top of the agenda for many legal managing partners and finance directors.
“PwC has also found that the average level of working capital in firms has increased, as has the reliance on external debt for certain parts of the legal sector.”