The settlement of a "significant claim" against historic law firm Swinburne & Jackson LLP was the catalyst for the firm's collapse, a report by administrators has revealed.
Gordon Goldie and Matthew Higgins of Tait Walker LLP in Gosforth were appointed joint administrators of the Gateshead-headquartered firm in February, after the business had traded for almost 200 years.
Ahead of a meeting of creditors, at the Newcastle Marriott Hotel on March 12, Goldie and Higgins have submitted a statement of proposals, which said the business, which had five offices and 39 staff, were affected by the claim against them, resulting in increasing insurance premiums. The report said attempts to introduce new capital and partners was unsuccessful and that “constant cash flow problems and frequent late payment of salaries has resulted in a number of staff leaving, which has further impacted on revenues and creditor pressure was evident”.
The report shows turnover dropped from £2.5m for the year ended March 2012 to £2.3m last year.
Attempts were made to sell the business and two notices of intention to appoint administrators were lodged in court before Tait Walker were called on February 3.
All five offices have been closed, resulting in all members of staff losing their jobs. The report said the administrators are now seeking to get a better result for the company’s creditors as a buyer can’t be found.