The management of professional services specialist DLA Recruitment last month bought out the company, in a bid to rid it of debts of more than £5m.

Under the leadership of MD Andrew Williams, DLA’s management paid just under £1m for the company after it was forced to call in receivers.

DLA had run up the debts after attempts to expand internationally backfired. Chief operating officer Justin Pearson sent an e-mail last month to other recruiters in a damage limitation exercise to scotch rumours of the company’s demise.

He said the company was running at an operating profit, but admitted it was unable to pay off an ‘inherited legacy of debts’.

Earlier in May, the company called in receivers Deloitte & Touche to recover its debts, after a stock market flotation and talks with investors failed to raise enough cash.

Williams said: ‘The new DLA is now mostly free from debt and has no outstanding liabilities. Since August 2000, DLA has been operating at a profit. For 2001, DLA has set itself a target for producing its first annual profit for three years, and so far we are ahead of budget.’

A new management team, headed by Williams, Pearson and Abi Staines, took over in March and has shouldered 60% of the deal.