The managing director, Stuart Leach, the client services director, Mark Rigby, and Belinda Webster, the finance director, have acquired the business from the receivers, the City accountants Carter Backer Winter.
MDC will no longer have a stake in the agency, which will be registered under a new name but continue to use the brand name Mr Smith.
Leach said: "We are relieved to have been able to rescue Mr Smith and are excited by the opportunity. The new agency has moved into new offices in Rathbone Place and we are sure Mr Smith will thrive in this new environment."
All 40 of the agency's original staff were made redundant last week.
The agency now intends to build up its workforce by employing freelances.
Mr Smith was formerly known as Interfocus, before being rebranded as part of an overhaul by MDC's chief operating officer, Chuck Porter.
The new owners have retained the agency's clients, which include Lloyds, Panasonic and Epson.