The situation at King & Wood Mallesons’ beleaguered European arm is coming to a head.

Sources at the firm tell me that it is heading for a pre-pack administration, with negotiations already at an advanced stage. An announcement is likely in the second half of next week.

The ultimate buyer is unclear at this point, but talks have previously been held with Dentons and even with KWM’s own Asian arm. DLA Piper and Greenberg Traurig are also understand to have been interested in certain partners and teams.

A KWM source with knowledge of the situation says that the discussions have been “positive.” I hope that whichever firm—or firms—buy the business manage to save as many jobs as possible.

Meanwhile, it has emerged that Barclays has amended its debenture agreement to take extra security over the firm’s European assets.

KWM Europe was initially forced to grant the bank, its key lender, a debenture over the firm’s assets in July. That debenture covered all of the firm’s securities, goodwill and uncalled share capital, intellectual property and current or future trade debts. Barclays imposed several restrictions on the firm, with documents revealing that KWM was required to gain the bank’s prior written consent before it could “sell, assign, lease, license or sub-license, or grant any interest in, [the firm’s] intellectual property rights.”

The new agreement is even more restrictive and covers additional parts of KWM’s European business. Interestingly, the range of circumstances under which the deed would become enforceable and Barclays would take control of the business were expanded to include any request by the firm to appoint an administrator.

KWM Europe’s future was cast into doubt by the collapse of its planned $18.4 million recapitalization. The firm’s European partners recently comprehensively rejected a financial rescue deal from the firm’s Asia arm.

Goodwin Finds Opportunity In KWM’s Crisis

They say that one person’s crisis is another’s opportunity.

That has certainly been the case for Goodwin Procter, which has over the past 18 months built a first-rate European private equity practice almost from scratch by cherry picking partners from struggling KWM Europe.

The firm started the process in April 2015 by hiring KWM’s former corporate co-head Richard Lever. Goodwin said at the time that Lever was being brought in to “spearhead” the growth of the practice in Europe. He’s certainly done that.

Lever was quickly followed by sponsor-side leveraged finance partner Simon Fulbrook, but things really ramped up after Goodwin’s capture in April of a prized six-partner private equity team from KWM’s Paris office. The group, which launched Goodwin’s office in the city, included local managing partner Christophe Digoy and private equity star Maxence Bloch, and generated around 8 million pounds ($10.1 million) in annual billings. (KWM is currently suing Lever and Goodwin over the Paris team’s move.)

Then, just last month, Goodwin recruited KWM’s former U.K. funds head Michael Halford, another of the firm’s highest billers, and a four-partner private equity team.

Perhaps the KWM well is now dry, as Goodwin has looked elsewhere for its latest hires. Shearman & Sterling’s former global private equity head Mark Soundy is set to join Goodwin next week, with its former London tax head Sarah Priestley, who specializes in private equity-related transactions, due to follow in January.

Soundy and Priestley are a close team: The pair joined Shearman together from Weil, Gotshal & Manges in 2013 and both resigned from Shearman earlier this year.

The hires will further reinforce what is now one of the most formidable private equity practices in Europe. I can’t remember many more effective and targeted recruitment drives.

Contact Chris Johnson at cjohnson@alm.com. Follow him on Twitter at twitter.com/chris_t_johnson