Dawsons LLP goes into liquidation following Penningtons takeover

The shell business of legacy firm Dawsons has gone into liquidation after failing to pay back debts to creditors, including a sum of almost £1m owed to Barclays.

The firm merged into Penningtons earlier this year, with 40 lawyers including seven partners moving across as of 1 May, but was renamed 2 New Square LLP for the purpose of the wind-up process.

The plan was for the LLP to use a company voluntary arrangement (CVA), which would see creditors repaid over an set period of time, but the shell business has now been forced into voluntary liquidation after failing to come to an agreement with those owed money.

Penningtons said that Dawsons’ ex-partners are now working with the liquidators James Bannon and Andrew Beckingham of BDO in order to repay creditors as fully as possible.

Former Dawsons managing partner Martin Codd said: “It was originally the intention of the Dawsons partners to use a CVA structure to wind up the activities of Dawsons LLP. Unfortunately, this has subsequently been found to be unworkable because of the stance taken by certain parties and the liquidation of the business was the only remaining option open to us.

“We will work closely and co-operatively with the liquidators to deliver the best result possible for the creditors.”

The 40-lawyer team which joined Penningtons last month included lawyers in employment, litigation, private client and commercial and residential property, taking Penningtons’ total headcount to 340, including 62 partners.

Dawsons also held talks regarding a potential tie-up with London firm Fladgate last year, although the discussions ultimately fell through.