National law firm Simpson Millar has insisted that it is “business as usual” after its listed parent copany, Fairpoint Group, announced its intention to appoint administrators.
Last month, the group announced that its debt had been sold on and that a £5m funding facility had been provided to its legal services business.
Its shares, which reached a high of 192p less than two years ago, have been suspended at 10p since late June, when Fairpoint’s original bank pulled its funding.
Fairpoint was originally a debt management business before buying Simpson Millar and three other law firms – Colemans-ctts, Foster & Partners and Abney Garsden – and in a statement to the stock exchange today said that ongoing support for the group’s subsidiaries outside of the legal businesses “is made more difficult due to the existence of the onerous lease on the group’s head office which has an annual commitment of c£1m per annum for a further four years”.
It continued: “As a result, and following detailed discussions and the evaluation of a number of options, the board has concluded that the holding company of the group, Fairpoint Group plc, is no longer able to continue trading as a going concern and has filed notice of intention to appoint administrators.
“Unless financial circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days. The secured creditor can, however, appoint administrators without the requirement for notice.
“The board do not expect this announcement to have a material impact on the planned disposal of the IVA and claims divisions to a third party, as previously announced on 12 July 2017.”
The statement said that the new facility would enable Simpson Millar and its subsidiaries “to continue to trade as going concerns and take advantage of the growth opportunity presented by the size and highly fragmented nature of the consumer legal services market-place”.
In a separate statement, Simpson Millar said it was now “independently financed” as a result of last month’s deal.
“Whilst we are saddened that this has been a difficult time for Fairpoint Group, it is business as usual at Simpson Millar and we do not anticipate any significant changes as a result of Fairpoint Group’s announcement.
“Simpson Millar would like to emphasise that its primary concern is the continued protection of its clients’ interests and service of its clients’ needs.
“The client services that Simpson Millar provides and the protections its clients enjoy are not in any way affected by the announcement by Fairpoint Group plc.”