PricewaterhouseCoopers is taking legal action against Tenet in an attempt to recoup over £2m in relation to the purchase of IFA contracts from network Berkeley Independent Advisers.
Berkeley Independent Advisers was a subsidiary of Berkeley Berry Birch plc, which went into administration in March 2006. PwC was appointed as the administrator of BIA.
Tenet bought out contracts for a number of BIA advisers and pipeline business, which protected advisers’ income and accepted liability for clawbacks, just before BIA went into administration. Liabilities for past business remained with BIA and was passed to the liquidators.
PwC says Tenet owes over £2m under the terms of the sale and purchase agreement.
A letter sent from PwC to BIA creditors last month and seen by Money Marketing says: “The company issued proceedings against Tenet on 29 February 2012 with documents being formally served on Tenet on 27 June 2012. Tenet submitted their defence on 14 September 2012.”
Joint liquidator of BIA Mark Hopkins says: “It is our understanding Tenet agreed to pay a consideration for the purchase of the business. The total amount to be paid by Tenet is in excess of £2m. Tenet could have paid off some of the amount already but is refusing to disclose this information to the administrators.”
Tenet distribution and development director Keith Richards denies any money is owed. He says: “PwC has exercised its right under the Limitation Act to make a claim for deferred consideration following the acquisition of certain assets of BIA, which Tenet believes is not owed.”
PwC says BIA creditors have so far been paid around £1m of £3m they have claimed through PWC, with any further payments dependent on the result of the Tenet dispute.
In addition, the Financial Services Compensation Scheme has submitted an interim claim of £3.1m against BIA with claims of £2.2m from that amount agreed. As of July, the FSCS had paid out £5.8m relating to 372 claims.