Fairpoint Group plc – the AIM-listed company that owns national law firm Simpson Miller – has today appointed joint administrators and announced its intention to leave the stock exchange, but stressed that its legal business will continue to trade as a going concern due to its separate funding.
Sandy Kinninmonth, Lindsey Cooper and Gareth Harris of RSM Restructuring Advisory in Manchester have been appointed as joint administrators to the group, a move that was foreshadowed in an announcement last week.
In a statement today to the London Stock Exchange – where Fairpoint’s shares have been suspended since late June, when its original bank pulled funding – the company’s directors said they intended “to continue to work with the administrators of Fairpoint Group plc in order to try and preserve any remaining stakeholder value”.
As a result of the appointment of administrators, chief executive David Broadbent is to leave the board with immediate effect – he only took on the role earlier this year after the departure of the previous chief executive.
Furthermore, with mutual agreement by the board, Shore Capital and Corporate Ltd has resigned as Fairpoint’s nominated adviser and Shore Capital Stockbrokers Ltd as its broker with immediate effect.
Under the AIM rules, if a replacement nominated adviser is not appointed within one month, the admission of the company’s securities will be cancelled on AIM.
“The company has no current intention of appointing a replacement nominated adviser,” the announcement said.
But it continued: “However, Simpson Millar and its subsidiary companies will continue to trade as going concerns through the dedicated funding line provided by Doorway Capital.
“The appointment of administrators to Fairpoint Group plc will have no impact on the day-to-day running of these businesses.
“The client services that Simpson Millar provides and the protections its clients enjoy are not in any way affected by the appointment of administrators to Fairpoint Group plc.
“Today’s announcement will have no material impact on the planned disposal of the IVA and Claims divisions to a third party, as previously announced on 4 August 2017.”
In a statement, Simpson Millar said it was “saddened that this has been a difficult time for Fairpoint Group”, but stressed again that it was “business as usual” for the law firm.
It also announced Greg Cox, its head of dispute resolution particularly well known for his costs expertise, as the firm’s new managing partner in the wake of the departure earlier this year of Peter Watson.
Mr Cox said: “Whilst the past few months have been challenging for the group as a whole, Simpson Millar has continued to be a business with great staff and a strong client base.
“The opportunities to grow the business in the current rapidly changing legal landscape are considerable and I am looking forward to working with the team to optimise those opportunities.”
In June, Fairpoint revealed that its bank, AIB Group (UK) plc, has assigned its debt to Doorway Capital, a specialist provider of capital to law firms.
In addition, Doorway has provided a receivables funding facility of up to £5m to Simpson Millar – that is, funding advanced against unpaid bills.