A leading City law firm founded by millionaire Labour donor Ian Rosenblatt has collapsed into bankruptcy after a run of losses and in the wake of a racism scandal.
RBG Holdings, which was started by Mr Rosenblatt in 1989, on Monday said it would be winding down in days after its directors failed to appoint administrators. Companies typically fail to appoint administrators when they lack sufficient cash to pay the fees that would be owed to the bankruptcy specialists.
RBG Holdings became the fourth ever UK law firm to float on public markets in 2018. Mr Rosenblatt, who helped to fund Sir Keir Starmer’s electoral campaign, has enjoyed millions of pounds’ worth of payouts from the company since it joined the stock market.
However, its share price has fallen by more than 90pc from its peak in 2021. In the years following its initial public offering, the City firm pushed to expand its business but this costly drive has led to a series of multimillion-pound losses.
Investor confidence has also suffered in the wake of a high-profile racism scandal that saw Nicola Foulston, RBG Holdings’ chief executive, ousted in January 2023.
The chief executive’s dismissal came after Ms Foulston was accused by former Rosenblatt partner Noel Deans of using the phrase “n—– in the woodpile” at a business dinner.
Mr Deans, an employment lawyer of Afro-Caribbean heritage, also claimed he had faced discrimination from Mr Rosenblatt himself after he took issue with the company founder’s decision to greet him with a fist bump on his first day of work. Mr Rosenblatt was ultimately cleared of racism by an employment tribunal last year.
RBG Holdings’ collapse comes after an exodus of top talent from its two subsidiaries, Rosenblatt and Memery Crystal. Dozens of senior lawyers have left both firms.
While RBG Holdings is being wound down, Mr Rosenblatt is seeking to continue conducting legal business via his newly founded firm Rosenblatt Law, which he set up in January. Forty of Rosenblatt’s most senior lawyers have moved to Rosenblatt Law.
Mr Rosenblatt has donated thousands of pounds to the Labour Party. In 2023, it was forced to hand back a £16,000 donation after The Telegraph revealed Mr Rosenblatt’s firm was working on behalf of CTB Capital, a sanctioned Russian bank.
Mr Rosenblatt is still RBG Holdings’ largest shareholder, with a 20.52pc stake in the publicly listed business. RBG Holdings’ other major shareholders include asset manager abrdn and London-listed bank Close Brothers.
RBG Holdings and Rosenblatt Law were approached for comment. Mr Rosenblatt declined to comment.
