Children’s charity St Christopher’s Fellowship is taking accountants MacIntyre Hudson to the High Court claiming bad advice on a merger.

The charity is reportedly seeking damages after a merger with the Young Builders Trust (YBT) went wrong when YBT collapsed into administration.

According to Accountancy Age, St. Christopher’s complains that prior to the merger MacInyre Hudson carried out due diligence checks on YBT in 2006, and found it had a well defined future income stream, had been successful in running contracts properly, and had good relationships with government offices.

However, soon after the merger took place, audited accounts showed YBT’s position had deteriorated with negative reserves and weaker-than-expected results.

St. Christopher’s 2007 annual accounts show it paid out £75,000 for costs incurred, mainly legal and professional, as a result of the administration of YBT Trust.

When YBT went into administration in March 2007, all of its 31 staff were made redundant. Nineteen staff took legal action against the charity for more redundancy pay but lost.

St Christopher’s is arguing that MacIntyre Hudson did not act on evidence which suggested over-optimistic figures for YBT.

It says if it had known about YBT’s issues from MacIntyre Hudson it would not have gone ahead with the merger.

MacIntyre Hudson was unavailable for comment.