Law Firm Forced Into Insolvency By Natwest

Banking giant Natwest forced a Manchester law firm into insolvency despite boasting a healthy £1m turnover.  EOS Law went into administration at the close of 2013 following the bank's decision to bring to an abrupt halt to increased lending facilities leaving the company owing its' creditors and members a whopping £2.3m.

Originally funded by a £500,000 start-up loan provided by Natwest, administrators BDO show statements how this was to be re-paid over a period of four years with an additional overdraft facility of £250,000.

Founded in 2010 by Simon Woolley, EOS Law made profits of over £700,000 in the company's last two years of business and turned over £3m.  The advent of the 'RBS Group credit policy for law firms' signalled the death knell for EOS when the bank denied them additional working capital facilities in December 2011.

Merger talks with national companies followed, cost cutting measures, reduced hours for fee-earners and even redundancies, insolvency was finally the only way out for this law firm who on the surface was proving a success story.

Whilst the RBS Group strenuously deny that the bank had changed policy they are keen to add that the bank are still keen on lending to law firms.  Speaking to the Law Gazette, a spokeswoman said "whilst the bank's lending policies are reviewed periodically to reflect economic and market conditions, our lending facilities are primarily based on the ability to service debt.

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