AlixPartners has declined to be named King & Wood Mallesons (KWM) administrators due to “concerns about funding”, The Lawyer has learned.
The firm will instead appoint Andrew Hosking from restructuring company Quantuma as administrator to the EUME LLP.
Hosking has worked on the liquidation of several law firms including Challinors Solicitors and Davenport Lyons. Challinors went into administration in 2013 and liquidation last year. A large proportion of the business left for Clarke Willmott and Cartwright King. Davenport Lyons entered administration in 2014 and was acquired by Gordon Dadds.
EUME managing partner Tim Bednall revealed the news to staff in an internal memo today. At the same time he also informed staff that Barclays had rejected all salary payments with immediate effect.
The memo read: “I appreciate that the position the bank has taken puts you all in a difficult position and I am really sorry that there is nothing further that I can do to cause the bank to change its mind. Although Barclays stands to lose a substantial amount of money, it will have benefited by around £5m in the last week in terms of business receipts and anticipated proceeds of the sale of part of the business.
“We have today filed a second notice of intention to appoint administrators at the court with an alternative administrator named on the filing – Andrew Hosking of Quantuma – after AlixPartners declined to be named as administrators because of concerns about funding. We will now be seeking to accelerate the appointment of Andrew Hosking as administrator.”
The last paragraph of his email informed staff that the firm’s restaurant, Stanley’s, named after SJ Berwin founding partner Stanley Berwin, has now closed.
KWM’s Europe and Middle East arm (KWM EUME LLP) filed an application to renew its notice of intention to appoint administrators today (10 January), buying it 10 more days to sell off as much of the business as possible and continue to negotiate a deal with the China partnership.
KWM China was understood late last year to be interested in buying out a number of litigation and corporate lawyers and their staff in London, plus core teams in Germany, Italy, Spain and Dubai. But internally rumours are surfacing that the deal could be on the rocks.
“It’s taking a worryingly long time to negotiate,” said a source. “We’ve heard the deal will be done tomorrow [Wednesday] or that’s the end.”
KWM first filed its intention to appoint administrators in late December following a failed recapitalisation of its EUME business and several senior exits. Since then groups of partners have departed for both US and UK firms, including former senior partner Stephen Kon, who is joining Macfarlanes alongside three partners.
In total, more than 40 partners left KWM across the UK, Europe and Middle East in the last two months of 2016 as the LLP’s finances reached crisis point and an administration became inevitable. Around 90 partners left the firm in total over 2016.
How the story unfolded:
27 Oct: KWM’s recapitalisation scheme stumbles and four stars quit
28 Oct: Exclusive: KWM former managing partner Day heads for Proskauer
10 Nov: KWM global boss Fuller steps down
11 Nov: KWM China bail-out: Partners have a week to agree to 12-month lock-in
18 Nov: Dewey administrator adviser drafted in on KWM rescue deal
22 Nov: KWM China bail out fails and EUME arm moots merger plan
7 Dec: Exclusive: Barclays takes extra lawyer of security over KWM assets
12 Dec: KWM tells staff it cannot guarantee wage payments after January
13 Dec: It’s over: KWM partners told that takeover deals have failed
22 Dec: KWM LLP files notice of intention to appoint administrators
The post AlixPartners pulls out of KWM administrator position appeared first on The Lawyer | Legal News and Jobs | Advancing the business of law.
#1 Lawyers Search Engine