The 16-office law firm consolidator shut down by the Solicitors Regulation Authority (SRA) in August has been placed into liquidation owing creditors nearly £17m, it has emerged.
It also appears that Kingly was in the process of another acquisition at the time it closed.
Earlier this month, Stephen Hunt and Kevin Goldfarb of Griffins were appointed Kingly’s joint provisional liquidators on the application of the SRA.
They were also appointed to Kash1 Ltd, Kash2 Ltd, Berkeley Asset Finance Ltd and NM Group Ltd, all arising from the regulator’s decision to intervene in Kinglys.
It is highly unusual for the SRA to close down a firm of this size.
The intervention was based on the firm not complying with one or more of the terms of its alternative business structure licence, and because there was “reason to suspect dishonesty” by Nurul Miah as a manager of the firm.
Kingly Solicitors, which changed its name last year from RH Legal, traded under several different names around the country: Richard Herne & Co, Hancock Quins, Austin Ray, Ray Nixon Brown, Beesons, Coles, Hughmans, and Giffen Couch & Archer.
According to a statement of affairs filed at Companies House, Kingly had assets of £1.7m, including £1m listed as an interest in East London law firm Wiseman Lee.
“The joint liquidators are reviewing the information in relation to the purchase of Wiseman Lee LLP and will report on this in due course,” it said. Wiseman Lee is still open for business.
No figure was put on the value of the firm’s work in progress or book debts as the benefit of these vest in the SRA under the Solicitors Act 1974.
Some £1.3m of the assets will cover what is owed to floating charge holders, with a further £327,000 available to unsecured creditors.
They are owed just shy of £17m, £11m of which has been allowed for potential claims by the SRA in respect of possible compensation arising from client account breaches.
A further £3m is owed to “connected” creditors, mainly NM Group (of which Mr Miah is sole director), £457,000 to the Redundancy Payments Service, £400,000 to HM Revenue & Customs, and £1m to dozens of trade and expense creditors – including several other law firms.
There is also a £1m contingency in respect of the liabilities of Wiseman Lee “and if the sale is classed as completed the company could be liable for these sums”.