The outlook for those owed money by failed personal injury firm Roberts Jackson has worsened even more, with unsecured creditors – who are owed an estimated £13m – set to receive just 1.5p in the pound.
It is still more than private equity firm NorthEdge Capital, which invested in the industrial disease specialist in 2014 and will not receive any of the £22.5m it is owed.
The firm was sold to Manchester firm AWH Legal in a pre-pack in September 2018 and it later emerged that a dispute with its former after-the-event insurer was the key factor in the firm becoming insolvent.
The book value of the work in progress bought by AWH was £13.4m, plus debtors, disbursements and accrued revenue totalling just over £6m.
AWH agreed to pay 10% of all profit costs and success fees from settled cases, 50% of the recoverable value of disbursements, 90% of debtors and 60% of accrued income.
The latest update from the joint administrators at Quantuma said they have so far recovered nearly £1.4m but earlier ambitions to recover as much as £3.5m have been dashed; with 300 active files remaining, likely to lead to £35,000 in recoveries, the administrators accepted AWH’s offer to pay £20,000 in full and final settlement.
Roberts Jackson had a £4.25m revolving credit facility with NatWest, secured by way of a debenture incorporating fixed and floating charges. The amount Quantuma estimated the bank would recover has been going down throughout the administration, and was now 20% – in 2020, the worst case scenario was put at 42%.
Unsecured creditors – who by law are entitled to a proportion of the proceeds where there is a creditor with a floating charge – were estimated at £13.7m, including £6m to medico-legal agencies. Counsel and other legal advisers were owed £2.4m.
Quantuma has so far received 109 claims from unsecured creditors worth £8.2m, and anticipated the dividend would be 1.5p in the pound, less than half of the meagre amount expected two years ago.
Quantuma is being paid £45,000 plus 3.5% of the value of the total assets realised.