Halliwells LLP accounts show £19.4m in bank loans
Halliwells has bank loans in place worth £19.4m according to the firm's latest Limited Liability Partnership (LLP) accounts.
The 2007-08 accounts, filed last week with Companies House, give details of the firm's highly unusual secured loan agreement with RBS, revealed last month by Legal Week - including the value of the loan.
The £19.4m loan, which is repayable in May 2011, is secured by a debenture, which effectively gives the bank security over the firm's assets.
According to the accounts the loan creates "fixed and floating charges over the current and future property and assets of the LLP."
A debenture agreement - which is rarely used by law firms - gives the bank greater rights in the event of a debtor going into administration, boosting the bank's position as a creditor and giving it greater control of assets.
The accounts also show that members' drawings for 2007-08 were higher than the firm's allocated profits - standing at £29.5m compared with allocated profits of £27.2m. The accounts show money owing to the firm from partners stood at £12.6m for the last financial year, increasing from £10.2m in 2006-2007.
A spokesperson said: "In any given year we pay out drawings in relation to profit from the previous year. This is standard practice."
The firm has been through a challenging year announcing three separate redundancy consultations with the most recent one coming in October.
The report shows revenues for the 2007-08 financial year stood at £87.5m down from £88.3m while the highest paid member took home £490,687 down from £607, 304.
In the first half of this financial year the firm reported a dip in revenue by 3.1% to £44m from £45.4m.
The spokesperson added: "There is growing market speculation regarding how professional services firms will fare in an economy where downsizing and reduced margins are commonplace."
"Halliwells faces similar challenges to other professional services firms but is in an strong position to respond to them. The multi-disciplinary nature of its business and the nature of its client base mean that the firm continues to perform extremely well."