Hammonds partners and former partners are preparing to pay back to the firm thousands of pounds each after it emerged that profit had plummeted during the last financial year.
Current and former equity partners (senior partners with a stake in the business) are being asked to repay earnings paid on the expectation of the firm’s profit being higher than it turned out to be.
In July 2005, Hammonds announced that it had made 127.6m in the 2004-05 financial year, with a profit of 17.8m. That figure meant profit had slumped by 25 per cent from 2004’s level.
However, the firm also announced that it had made 8.1m less in 2004 than it had reported originally, meaning the partners will now have to pay money back.
In May 2005 the partners signed a ‘lock-in’ agreement, meaningthatnoequity partners can leave the firm before May 2006.