DWF seals Cobbetts pre-pack deal; Pinsents and Walker Morris advise

DWF has sealed its acquisition of Cobbetts via a pre-pack deal, after KPMG was today (6 February) appointed as the stricken firm’s administrator.

An agreement has been reached which will see DWF take on the bulk of Cobbetts’ business, with 419 of the law firm’s employees and partners from its four offices in Manchester, Leeds, Birmingham and London understood to be transferring to DWF.

Legal Week reported earlier this week that it was understood that not all of Cobbetts’ 74 partners would transfer over to DWF.

Mark Firmin, Brian Green and Howard Smith of KPMG’s restructuring practice were today (6 February) appointed as joint administrators, in a move required to enable a pre-pack deal to progress.

KPMG is being advised by a Pinsent Masons team led by partner Steve Cottee, who also acted for the administrators of insurance law firm Hextalls in 2009 while at his former firm Lawrence Graham,

Cottee, who joined Pinsents in 2011, also advised Hill Dickinson on its 2010 purchase of Halliwells’ Liverpool and Sheffield offices, and in the wake of the Halliwells collapse assisted the Solicitors Regulation Authority in establishing a protocol for dealing with law firm insolvencies.

Walker Morris took the lead role for Lloyds TSB, Cobbetts’ major creditor, with a team led by banking, restructuring and insolvency partner Simon Clark. Cobbetts last month created a debenture securing all of its debt and future debt to the bank.

Cottee commented: “We know having worked on the administration of Hextalls and helped purchase parts of the Halliwells business how distressing these situations can be. However, we are pleased that we have been able to help KPMG achieve a good result in a very short time frame. The protocol which the SRA has developed for these scenarios – which we input into – is having the intended effect.”

A deal was expected to be announced yesterday (5 February); however, it is understood that final confirmation was pushed back due to the complicated nature of the talks.

The news comes after Cobbetts last Wednesday (30 January) announced it had filed a notice of intention to appoint administrators following bleak trading results at the end of 2012. The deal comes just 12 months after DWF and Cobbetts held merger talks, with the breakdown of the proposed tie-up attributed at the time to “uncertain market conditions”.

For DWF, the acquisition marks yet another step in the firm’s rapid growth as it seeks to join the UK top 20, and follows on from its acquisition of professional indemnity firm Fishburns on 1 February.