HALESOWEN based law firm Challinors are facing administration with debts of over £11.2 million including £67,824 to Sandwell Council.

The firm, which has offices in Halesowen, Birmingham and Wolverhampton and employs over 200 people across the region, has appointed insolvency specialists KSA.

Challinors' biggest debtor is Allied Irish Bank which is owed over £4m and £500,000 to both HM Revenue and Customs and South Tyneside Borough Council Pension Fund.

A spokesman for Challinors said: “Working in conjunction with our key stakeholders, we have taken steps to protect our position pending a sale of the business by filing a notice of intention to appoint an Administrator.

“This will allow an orderly transfer of the business in the near future.”

The spokesman added: “In the interim, the business continues to trade normally and we give an assurance that the interests of our clients and staff have been safeguarded.”

In all the company owes money to 250 companies and individuals including £212,887 rent for its swanky Birmingham office, £250,000 to software developer Cosmic Concepts and £350,000 to financial advisors Investors House PLC.

Sandwell taxpayers will be worried the full £67,824 owed to Sandwell Council will not be repaid as the percentage of the debts creditors will receive is yet to be determined.

However, Companies House records reveal a new company called Challinors Legal Limited was incorporated on last week, with three directors named who have no direct link to the existing firm.