Accountants win court battle

Former RSM Tenon group can move ahead with new practice

A GROUP of partners who left accountancy firm RSM Tenon have won a court battle that will allow them to make plans to set up their own practice in Glasgow.

The six partners – Charles Burton, Tom Arbuckle, John Blair, Raymond Clarke, David Holt and James Goodman – left the struggling firm in August and announced they were planning on starting up a new venture at some point in the future.

At the time, the firm said those who had left would not be able to work until May 2014 because of the personal covenants they had with the business. But just a few days later, RSM Tenon was acquired by mid-tier rival Baker Tilly in a prepack administration deal.

A few weeks after completing the acquisition, Baker Tilly then tried to keep those covenants in place for all of the Glasgow partners who were on gardening leave from RSM Tenon.

However Lord Malcolm, at the Court of Session in Edinburgh, has now found in favour of the former RSM Tenon partners.

He ruled the personal covenants aimed at preventing the setting up of an alternative business could not be applied by Baker Tilly.

Mr Burton, who was the managing partner in Tenon’s Glasgow office, said: “This has been a real David against Goliath fight but I’m very pleased that yet again David has won. My colleagues and I were very disappointed at the stance taken by Baker Tilly.

“We had no relationship with them and what they were trying to do was overturn a century of law to restrict us from earning a living. They have spectacularly failed.”

Mr Burton said the legal decision means the partners can now move forward and being to look at setting up a new firm.

He said: “All six of us are wellknown in Glasgow’s financial sector and we’ve been very concerned about the impact Tenon’s difficulties have had on our clients and the staff.

“Now the position has been clarified by Lord Malcolm, my colleagues and I will be moving forward with our plans to set up a new partner-led service as soon as possible.

“With legal action hanging over us, this has been a really stressful time but we now want to put that behind us and get on with building a successful accountancy and business advisory firm in Glasgow.”

The former RSM Tenon partners were represented by Advocate Jonathan Brown and Andrew Sleigh from law firm Levy & McRae.

RSM Tenon employed around 60 people in Glasgow plus a further 160 in other Scottish offices.

Although the business fell into administration, the Scottish arm was thought to be profitable with a turnover of around £14 million.

Earlier this month, eight former partners from RSM Tenon’s Edinburgh office – including regional managing director Margaret Laidlaw – took new jobs at Mazars in the capital.

RSM Tenon saw its shares slide from 66p in early 2011 to 1.12p when the stock was suspended in August.

It had struggled under an £80m debt owed to Lloyds Banking Group and even had to restate its own accounts in January 2011.

Baker Tilly did not respond to a request for a comment.