Ince: Investigations continue
The administrators of Ince & Co are looking at whether they can enforce a personal guarantee to secure the £1m purchase money outstanding from what was Axiom DWFM.
Ince went into administration in April. Andrew Hosking and Sean Bucknall, the joint administrators at Quantuma, sold it to Axiom DWFM in a pre-pack two weeks later for £2.2m.
After also buying Plexus Law out of administration, what had become Axiom Ince then collapsed, leaving in its wake £66m of missing client money, a host of questions and a headache for the Solicitors Regulation Authority.
Axiom paid £1m upfront for Ince and was meant to pay the remaining £1.2m in instalments of £50,000 a month for two years.
However, in an update published last week, the administrators said they had only received £200,000 of this.
“Given the recent administration of Axiom, further payment of the outstanding deferred consideration [is] unlikely. A senior member of the management team of Axiom has provided a personal guarantee for the sale consideration.
“The joint administrators are considering their options in this regard but do not wish to provide more information at this time in order to avoid prejudicing any future actions.”
Their report added that, as part of the sale, Axiom had also been required to make licence fee payments in respect of a six-month licence to occupy for three premises previously used by Ince. Nearly £550,000 was received before the payments stopped.
There had been a further potential realisation from savings in the tax liability of Ince’s former partners.
“Potential cost savings by Axiom Ince Ltd were expected to be the lower of 20% of partner tax not funded or funded and recovered, up to a maximum of £2m. Given [Axiom Ince’s administration], this will now not be possible.”
Investec Bank is owed around £15m as the secured creditor, HM Revenue & Customs approaching £11m, with hundreds of unsecured creditors – including dozens of barristers – owed £41m.
Quantuma did not say how much Investec could hope to recover, but it was “not anticipated” to be all of it.
Having originally said HMRC could receive 4.7p in the pound, now it said: “Depending upon receiving sufficient realisations to pay the preferential creditors in full, the joint administrators anticipate paying a dividend to HMRC in respect of their secondary preferential claim.” Unsecured creditors are set to miss out altogether.
The report said Quantuma’s initial assessment of potential claims against parties connected with Ince “revealed matters that the joint administrators considered merited further investigation”. These are ongoing.
