The chairman, Tim Delaney, described the move as a "balance sheet restructuring to streamline our reorganisation". The agency in fact changed the names of its main trading companies from Leagas Delaney Group and Leagas Delaney London to TM Limited and TM London in December and set up new companies in their place.
TM London Limited appointed administrators from Grant Thornton on 18 December. Creditors were sent a letter on 23 December asking for details of their claims and a creditors meetings will be held in due course.
A new company called Leagas Delaney - London Limited, set up on 4 December by the Leeds office of lawyers Pinsents, is now operating.
The restructure is designed to protect the network from liabilities arising, among other things, from its exit from the US market last year. Delaney admitted: "We have wound up one company in order to start another. To create a new vehicle we have to go through this process."
The agency undertook the reorganisation following advice from KPMG and Lloyds-TSB. It has lost key clients including Adidas, Harrods, and the BBC and has not replaced them with new accounts of equivalent weight. It is repitching for Hyundai. In France, the agency has lost Clarins and Ikea and is in talks with other Paris agencies about a merger.
It is the second time that the agency has had to take drastic financial action. In 1986 it was bought by Abbott Mead Vickers to prevent the company closing.