Manches went into
administration after failing to pay a whopping tax bill, it has been revealed.
Earlier this year questions were asked when the firm's financial results revealed profits had dropped a massive 42% to £2.15m, just months after its chief exec quit (after less than two years in the job) and it lost family star Helen Ward (who represented Bernie Ecclestone and Guy Ritchie in their lucrative divorces). At the time Manches told the press it was actually in rude health. It said it would continue to sponsor the Manches Cup sailing competition and, when pressed in July, Managing Partner Melvin Pedro told RollOnFriday, "we are seeing the benefit of a good upturn in our transactional business and our cost-cutting programme. We'll be announcing a number of lateral hires soon. Roll on Monday."
But behind closed doors it was a different story. A Creditors Notice filed by the administrators and reported in The Lawyer reveals that Manches' bankers, having increased the firm's overdraft facility by £400k to £6.4 million, refused to extend it further, leaving the firm unable to pay its rent or professional indemnity insurance. Manches also failed to find enough change down the back of the sofa to pay its tax, and sent a £90k cheque to HMRC in response to a £715k VAT bill.
Penningtons, having originally entered negotiations to merge with Manches on an equal footing, snapped up the bust firm for £500k in a pre-pack administration in October, presumably gambling that it can recover enough fees for work in progress and retain enough divorcing celebrities to make the purchase worthwhile. Meanwhile the 46 legacy Manches partners may be ruing splashing out on their boating jolly: together they owe £1.1 million in personal tax liabilities, with reports of recriminations flying.
Tip Off ROF
Earlier this year questions were asked when the firm's financial results revealed profits had dropped a massive 42% to £2.15m, just months after its chief exec quit (after less than two years in the job) and it lost family star Helen Ward (who represented Bernie Ecclestone and Guy Ritchie in their lucrative divorces). At the time Manches told the press it was actually in rude health. It said it would continue to sponsor the Manches Cup sailing competition and, when pressed in July, Managing Partner Melvin Pedro told RollOnFriday, "we are seeing the benefit of a good upturn in our transactional business and our cost-cutting programme. We'll be announcing a number of lateral hires soon. Roll on Monday."
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Monday |
But behind closed doors it was a different story. A Creditors Notice filed by the administrators and reported in The Lawyer reveals that Manches' bankers, having increased the firm's overdraft facility by £400k to £6.4 million, refused to extend it further, leaving the firm unable to pay its rent or professional indemnity insurance. Manches also failed to find enough change down the back of the sofa to pay its tax, and sent a £90k cheque to HMRC in response to a £715k VAT bill.
Penningtons, having originally entered negotiations to merge with Manches on an equal footing, snapped up the bust firm for £500k in a pre-pack administration in October, presumably gambling that it can recover enough fees for work in progress and retain enough divorcing celebrities to make the purchase worthwhile. Meanwhile the 46 legacy Manches partners may be ruing splashing out on their boating jolly: together they owe £1.1 million in personal tax liabilities, with reports of recriminations flying.
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