King & Wood Mallesons LLP has filed a second notice of intention to appoint administrators, delaying the administration process by 10 more days as it looks to secure a deal with the firm’s China partnership.
The Europe and Middle East arm of the firm filed an application to renew its notice this morning (10 January). It first filed the notice on 22 December, which expired today. The firm is expected to appoint AlixPartners as administrators. CMS Cameron McKenna is advising it on the administration process.
Meanwhile Addleshaw Goddard is advising KWM China on its potential purchase of a number of fee-earners and staff in London, Dubai, Italy, Germany and Spain.
By renewing the notice KWM has bought itself more time to sell off as much of the EUME business as possible. The notice provides it a 10-day moratorium over its assets while it attempts to secure a deal.
Last week KWM informed 100 of its staff that their salaries would not be paid this month. Staff were handed letters on Tuesday (3 January), the first day back at work after the Christmas period, informing them of the pay freeze.
The Lawyer first revealed late last year KWM had informed staff the firm could not guarantee wage payments after January 2017. The news came at the same time it emerged a potential deal to sell KWM’s EUME LLP to Dentons had failed.
KWM 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.
It emerged late last week suppliers to KWM’s London office had started to cancel contracts with the firm, with partners unable to use postal services or couriers.
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
4 Nov: KWM energy team departs for Squire Patton Boggs
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
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