D-Day looms for insolvent law firm

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CRISIS talks are taking place in a last-ditch attempt to save a Scarborough law firm.

North Yorkshire Law, which has its head office in Albemarle Crescent, has been declared insolvent.

The move has threatened the future of more than 30 employees, many of which have already endured months without being paid.

It is not known how far the firm is in the red, but money is owed to staff, the banks and Revenue and Customs among others.

A creditors meeting was held last week to discuss the future of the practice.

Insolvency agent Geoffrey Weisgard, of Mitchell Charlesworth, appointed on behalf of North Yorkshire Law, said: “Quite clearly the firm is in financial difficulty.

“We are trying to put forward a rescue plan through a Partnership Voluntary Arrangement.

“That is a deal where by the creditors accept so many pence in the pound on the money they are owed over a period of time.

“The partners made an offer to the creditors and the creditors will decide whether they are going to accept it.

“We had a meeting last week where an offer was put forward but the creditors wanted more information. There is another meeting on Monday, hopefully a deal will be made.”

As staff are among those owed money they are listed as creditors and will be able to vote themselves on whether to accept the offer put forward by the firm.

Individual Voluntary Arrangements, which work on a similar basis, will also be put forward by the practice’s three partners.

However if the creditors refuse to accept the offer North Yorkshire Law will cease trading almost immediately and its partners will be declared bankrupt.

Insolvency consultant Phil Stone, who has been appointed by the partners, said: “I believe the liabilities are significant, however we are hopeful an offer will be accepted on Monday.

“For an offer to be accepted the vote must be 75 per cent, in money terms, of those that are owed must vote in favour.”

Mr Stone explained that if the offer is rejected and the firm is forced to cease trading all clients will be passed on to other solicitors by the Law Society.