A meeting of creditors of the London firm last week voted down a rescue proposal after objections from the rock star.
Sting claims to be owed pounds 7.7m by the firm. He has alleged it misappropriated funds from him in the course of setting up and running an investment company on his behalf, which is contested.
The creditors' meeting heard the firm's partners, Keith Moore and Malcolm Patrick, propose that all uncontested debts - including some to Sting-related companies - be repaid over five years. The payments, they argued, could come from the pair's future earnings. According to Accountancy Age magazine, Mr Moore is currently running an office services business, while Mr Patrick continues as a sole practitioner.
The meeting degenerated into a row, say observers, after one creditor accused the rock star's lawyers of trying to bankrupt the partners.
Last November Mr Moore was questioned by police at Holborn police station. Scotland Yard says the Fraud Squad is preparing a report for consideration by the Crown Prosecution Service.
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