The former CEO of a north-west conveyancing outfit that collapsed into administration owing more than £6m looks set to be the biggest loser from the firm’s demise. Lancashire property magnate and racehorse owner Darren Yates, who owned children’s homes before selling out to private equity, is owed £2.9m as an unsecured creditor of once award-winning Alexander Grace Law. 

A loan of £2,866,714 from Yates, who became the firm’s CEO in 2021, appears in a notice of administrator’s proposals filed at Companies House. The loan is included on a list of unsecured creditors collectively owed £4.49m. The second-largest unsecured creditor is Spicerhaart, a Colchester, Essex-based estate agent, which is owed £468,000.

Darren Yates pictured with jockey Frankie Dettori

Darren Yates (right) pictured with jockey Frankie Dettori

Source: David Cheskin/Alamy

HMRC is owed over £2m, of which over £500,000 is unsecured, including in VAT and national insurance contributions.

Alexander Grace Law, led by legal executive Donnamarie Sturrock and solicitor James Young, grew rapidly following its foundation in 2016. In 2021 the firm scooped four awards at the ESTAs, the 'most prestigious awards in the UK conveyancing sector'. 

However, in late-June this year the Council for Licensed Conveyancers said the firm was undergoing a ‘managed closure’ and would not complete any more transactions.

The aim had been to complete a controlled closure by September so the firm could ‘recover work in progress which would have been sufficient to reduce the company’s debts’, administrator Begbies Traynor reports. However, talks with HMRC over ‘time to pay’ failed and the tax authority moved to initiate winding-up proceedings. The firm’s predicament was exacerbated by its insurers refusing to extend cover beyond June.

Most of the work undertaken by Alexander Grace was on a ‘no complete no fee’ basis, and the panels removed the work. That did not allow the realisation of work in progress on those files, the administrator says. Files that were shifted to other firms, including Amity Law, were treated as new cases.

Unsecured creditors are 'unlikely' to see any return, says the administrator, while it is ‘uncertain’ whether HMRC will receive any dividend as a secondary preferential creditor.

Former employees are owed under £40,000 in total. As preferential creditors, they are likely to see a dividend; but the administrator cannot yet confirm when or how much. 

 

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