An administrators’ progress report for the now-defunct Parabis Group, published this week on Companies House, showed that unsecured creditors will receive only half of what was already a dismal return on their outstanding debts.
One of the first firms to benefit from sweeping liberalisation of the legal services market in 2012, Parabis was placed into a pre-pack administration last year in a process handled by AlixPartners.
The latest progress reports dated from November to May 2016 shows unsecured creditors will receive less than a penny in the pound of what they are owed, notably down from the original estimate of two pence.
The report also showed the total sum owed to unsecured creditors has increased to £79m with the uplift said to be due to a VAT liability across seven members of the group. In January this year administrators had put that figure at around £50m.
Lenders and financiers are owed a total of £65.1m across the Parabis group which comprises the first lien lenders which will receive between 40% and 57% what is owed to them, while the second lien will receive nothing.
The report added: ‘The administrators also liaised with company staff in order to confirm whether there was any conduct that required further investigation…Based upon the outcome of the investigations, there were no matters identified that required further action.’
The administration is likely to be extended for an extra 12 months, with the next progress report to be published in November this year.
In November 2015, a buyout team comprising the founders of the Parabis Group formally acquired its defendant insurance firm Plexus Law, enabling the transfer of over 900 staff and supported by a £4.2m loan. The sale was facilitated by a £4.2m loan and based on Plexus Law’s predictable cashflow generation, supported by the strong net debtor and work in progress positions of the business. The deal took less than three weeks to complete.
sarah.downey@legalease.co.uk