A breakdown in relationship with a property developer was at the root of the decision to put the solvent owner of a new-model law firm into administration, public documents reveal. According to a notice of administrator's proposals posted by Companies House today, Flourish Holdings Limited, the owner of Cardiff-based Carbon Law Partners, has sufficient property to make a distribution to unsecured creditors. 

Carbon Law, set up in 2014 by solicitor Michael Burne, operates as a network of self-employed lawyers based in Cardiff, Birmingham and London. The business made headlines in 2015 when it became one of the first firms to receive public funding under a Welsh government initiative to stimulate the legal sector. Since 2018 it has been owned by Flourish Holdings, along with a support service company, Carbon Managed Services Limited, and a business set up to provide unregulated professional services. Flourish was put into administration last month.

According to proposals drawn up by Andrew Beckingham of corporate recovery firm Leonard Curtis, Carbon Managed Services Limited ran into difficulties because of 'difficult' trading performance and cash-flow and was unable to service a £250,000 debt to A&R James Assets Limited, which describes itself as a developer of building projects. 'Following an evident breakdown in relationship between A&R James Assets Limited and Mr Burne, A&R James Assets Limited petitioned the court for an administrator to be appointed to Carbon Managed Services.'

Following the appointment of administrators to the services company, disputes arose over access to the law firm's client management and data systems and to office premises, the document states. The directors of Flourish appointed administrators amid concerns that 'hostile third party actions' might damage the value of its main asset, Carbon Law Partners, the administrator states.

Creditors have until 3 February to vote on the proposals. Burne told the Gazette that Carbon Law Partners is unaffected by the restructuring.