Professional advisers handling the affairs of collapsed firm SSB Group have not been able to trace enough assets to pay their own fees, it has emerged.

A newly published report on the first six months of the administration, by FRP Advisory, has revealed that the sale of the Sheffield firm’s work in progress comes to just £731,000. That compares with more than £200m that is owed to creditors by the business, which went into administration in January.

The FRP report states that there were insufficient assets in the estate to meet administrators’ remuneration in full, together with the fees due to legal adviser Pinsent Masons and solicitor manager Leonard Curtis Legal. The joint administrators therefore sought a contribution to these costs directly from SSB’s biggest creditor, litigation funder Katch Fund Solutions. The company provided funding to allow the joint administrators to draw fees of £540,000 during the last six months.

The pre-administration fees come to around £120,000, while the total costs incurred in the reporting period come to £822,000 based on 2,180 hours worked.

The report offers no hope to creditors owed millions by the claims firm, which had thousands of ongoing cases when it went under.

Work in progress was transferred to a number of providers - Cheval Legal, Harcus Parker, Consumer Rights Solicitors, JMR and the Recovery First Panel. The money paid included £186,000 for goodwill and shares in SSB Compliance, which has already been used to pay off the HSBC fixed charge.

Administrators retained 24 staff to assist with transferring client data. but they were made redundant and all offices vacated by the end of March. On appointment, funds of around £112,000 were held in the client account, which has now been brought down under £50,000 after some client balances were reconciled.

Katch, which is owed £63m, is entitled to various assets recovered in the administration. Even after these funds are realised, the company is likely to suffer a ‘significant shortfall’.

Employees owed £237,000 for arrears of pay, unpaid pension contributions and holiday pay are unlikely to receive a return, meaning they will have to pursue their claims through a government-backed scheme. HM Revenue & Customs, which has a claim for £129,000, will also receive nothing.

The outlook is equally bleak for 47 creditors who have submitted claims together worth £28m. According to the company’s books and records, joint administrators estimate that £142m may be left owing to unsecured creditors in total.

SSB is one of the biggest-ever law firm failures. Some 220 people lost their jobs and a string of legal businesses were left nursing debts running into thousands when the group went under. Former cavity wall clients have since come forward to say they are being chased for legal costs, having been promised their cases were no win, no fee.

The matter has also prompted questions about the SRA’s role. The Legal Services Board announced in April it would conduct a review of the regulator’s actions, in conjunction with a similar review of the handling of the Axiom Ince closure. It was said at the time that the SSB review would be completed this summer. The Axiom Ince review was scheduled to be published in the spring but has yet to appear.

 

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