King & Wood Mallesons LLP has filed a notice of intention to appoint administrators, The Lawyer has learned.
A statement from the firm read: “King & Wood Mallesons LLP (London) can confirm that it has, today, filed a Notice of Intention to Appoint Administrators with the court.
“The Notice is designed to protect the firm from its creditors and allows it to maintain client service as it continues to explore all available options. The firm’s management team and financial advisers continue to work to ensure the best possible outcome for clients and staff, and this move supports these efforts at a key point for the business. We have no further comment to make at this time but will issue further updates as appropriate.”
The petition to the court follows a year of partner departures and mounting debt pressures. The firm is understood to be filing for administration now ahead of a rent payment later this month and its January tax bill.
KWM is in the process of finding homes for as many lawyers, staff and trainees as possible. Groups are already set to head to Reed Smith, Covington & Burling, Winston & Strawn, DLA Piper and Greenberg Traurig in the New Year.
KWM’s China arm is in talks to pick up a number of the firm’s European offices, including in Spain, Italy and Germany. It is also in talks to buy out a small number of lawyers in the London corporate practice in order to maintain a UK presence following the administration.
The Chinese partnership has instructed Addleshaw Goddard in the UK on the purchase plans and any reputational issues as a result of the collapse of the EUME business.
KWM EUME’s financial difficulties reached a peak this autumn following a failed capital call after four big-hitter partners, including head of investment funds Michael Halford and former managing partner Rob Day, resigned on the same day.
Several weeks later, KWM EUME partners were asked to agree to 12-month lock-ins in order to receive financial support from China. However, the plans failed, with not enough partners agreeing to the terms of the deal.
KWM admitted it would need to find a buyer for its EUME arm in November as it emerged the £14m China rescue deal had failed.
It then emerged Dentons was in talks with KWM management about buying out the entire EUME business, but negotiations eventually fell through with Dentons taking its offer off the table.
A steady stream of partners have continued to depart from KWM amid the fall-out, including a six-partner real estate team to DLA Piper, a six-partner group to Greenberg Traurig and a three-partner competition team to Macfarlanes.
Former EUME senior partner Stephen Kon will join Macfarlanes as a consultant.
Former EUME head William Boss is moving to Addleshaw Goddard, while head of litigation Craig Pollack is moving to Covington & Burling alongside partner Louise Freeman.
Global managing partner Stuart Fuller also stepped down from his role in recent months to return to fee-earning. His successor has not yet been elected.
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