Plexus Group - Case Update

Last month, we wrote about how the business and assets of the Plexus Group, an insurance firm consisting of Plexus Legal LLP and Plexus Law Limited in England and Plexus North LLP in Scotland, were acquired by national law firm Axiom Ince Limited. At the time, the financial terms of the deal had not been disclosed, but it was reported that 540 jobs would be saved.

Now, Joint Administrators from Interpath have filed their proposals, giving us more visibility into the events leading up to the administration and the terms of the sale.

The Group entered administration after a turnaround plan developed by management was hampered by a lack of available cash. In late May, HMRC issued a demand for immediate payment of the £4.3m it believed it was owed. Following this demand, Access Capital Partners, the majority shareholder, withdrew its support and proposed funding.

Interpath was engaged to conduct a sale process. The sale to Axiom Ince was completed on 7 July, immediately after the Joint Administrators were appointed.

The total consideration for the Plexus Group was £1.1m. £350,000 was paid immediately. The remaining £750,000 will be paid in three quarterly instalments of £250,000, with the last payment being made on 7 April 2024.

512 employees transferred to Axiom Ince on completion of the sale. 105 objected to the TUPE transfer and their employment ceased on the completion of the sale, although no redundancies were made.

Secured creditor AIB Group, which is owed approximately £4.6 million, is expected to suffer a significant shortfall, receiving only £185,000 under its fixed charge security and £90,000 to be paid as a deed of release fee.

A dividend should be payable to HMRC as secondary preferential creditor from Plexus Legal LLP, although the quantum and timing of the dividend is unclear. Unsecured creditors will likely receive nothing.

The Joint Administrators’ proposals can be found HERE. They have been assisted by Macfarlanes.