National UK defendant insurance firm Plexus Law has been sold out of administration in a deal that secures the jobs of 520 employees and 20 fixed share partners.

The Leeds-headquartered firm has been acquired by Axiom Ince Limited, owner of UK law firm AxiomDWFM and international insurance specialist Ince & Co, which it bought out of administration in April. 

Plexus had filed a notice of its intention to appoint an administrator in early June after investors decided not to put more money into the business following the discovery of historical financial irregularities that had led to the overstatement of the firm’s profits.

The pre-pack sale comes on the same day a team from Interpath Advisory, advised by Macfarlanes, was appointed joint administrators of Plexus Law’s businesses.

Joint administrator James Clark said: “Undoubtedly, it has been a very difficult few years for Plexus, and so we’re pleased to have been able to conclude this transaction which not only secures the future of the business, but importantly secures 540 jobs without any need for redundancies.

“Right from their initial expression of interest, Axiom were determined and committed to acquiring the practice, safeguarding jobs and importantly, helping to protect client interests.” 

Interpath Advisory had initially been appointed to explore the options available to Plexus including new investment or sale and said a number of parties, including Axiom, expressed an interest in the business.

Plexus, which has seven offices in the UK, is one of the largest firms in its field, handling more than 50 public sector clients and working with four of the top 10 motor insurers. It was set up in 2017 when it was acquired out of private equity-owned Paribas Law, which had collapsed. Interpath said a new management team “had discovered that contingent fees were over-recognised in the group’s accounts leading to an overstatement of profits in FY20 and FY21”. 

Interpath added: “Filing of the FY21 statutory accounts was delayed as a result of the forensic investigation and the arising adjustments reduced previously reported profits to a loss-making position. This prompted a significant cash requirement which was then further exacerbated both by the impact of Covid-19 and declining sales in an increasingly competitive marketplace.”

The Macfarlanes team advising on the deal included restructuring and insolvency partner Paul Keddie and senior associate Amy Walker. Keddie said: “We are pleased to have been able to advise on this transaction and to have secured a positive solution for Plexus’ clients and employees.”

Axiom DWFM was formed in 2021 when London firm Axiom Stone merged with regional outfit DWFM Beckham. It has offices in London, Bristol, Swindon, and Birmingham and is targeting revenue of £100m by 2025.

Ince & Co, meanwhile, continues to trade as a separate entity. Last year, rival international insurance-focused firm Clyde & Co merged with the UK’s BLM suggesting there is a similar logic behind the Plexus acquisition.