King & Wood Mallesons’ (KWM) struggling European arm has filed an intention of notice to appoint administrators.
The firm made the filing earlier today, confirming the move in a statement. It said: “King & Wood Mallesons LLP 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.”
Despite today’s announcement, the firm is not expected to file for pre-pack administration until January, with numerous partners and teams being acquired by rival firms ahead of this move.
Earlier today, Legal Week reported that Orrick Herrington & Sutcliffe and Keystone Law have hired a partner each, with Orrick adding London private equity partner Ylan Steiner and Keystone hiring European commerce and technology head Jeremy Schrire.
Yesterday (21 December), it was announced that former European senior partner Stephen Kon is to join Macfarlanes along with fellow competition partners Tom Usher, Cameron Firth and Christophe Humpe.
Meanwhile, finance partner Ian Borman is set to join Winston & Strawn, while Reed Smith is to hire KWM financial regulatory partner David Calligan and is understood to be in ongoing discussions with a larger number of KWM partners across its finance and tax teams.
Two six-partner teams are set to join Greenberg Traurig and DLA Piper respectively, while KWM’s China arm is in discussions to take on partners in multiple international offices including Germany, Spain and Dubai, as well as corporate and litigation teams in London.
Issues for the legacy SJ Berwin business came to a head in late October when four high profile London partners resigned, including former managing partner Rob Day and UK funds head Michael Halford, who are joining Proskauer Rose and Goodwin Procter respectively.
The exits forced the firm to put a planned £14m recapitalisation on hold while it reassessed its financial situation, prompting a revised proposal that would have secured an additional bailout from the Asian arms of the business had European partners agreed to it.
In a vote of no confidence in the business, just 16% of European partners approved the plan in full, leaving management seeking an alternative including a merger. Discussions with firms including Dentons about a whole-firm takeover failed, prompting the current team-by-team exodus.
KWM is being advised by CMS McKenna as well as turnaround specialists Alix Partners.