The latest progress report from the administrators of King & Wood Mallesons’ former European arm has revealed the payments made to advisers in the last six months, as the winding up of the collapsed firm continues.
The report reveals that administrator Quantuma received £113,830 ($146,524) for its work on wrapping up the firm’s limited liability partnership and its employee holding services company during the period from Jan. 17 to June 16 this year.
To date, Quantuma has received just over £1.7 million ($2.19 million) for its services. The report states: “We believe this case to be of above-average complexity and no extraordinary responsibility has to date fallen on the joint administrators.”
The legal costs incurred so far during the administration, which began on Jan. 17, 2017, have gone far beyond the original estimate of £450,000 ($579,300). Firms including CMS and Pinsent Masons have, to date, been paid out more than £1.5 million ($1.93 million) in fees, while solicitor manager fees paid to Ashfords have amounted to £376,538 ($484,730), compared to the original estimate of £120,000 ($154,480).
During the most recent review period, CMS received £13,949 ($17,957)for its advice on matters including the operation of KWM’s Germany branches, while Pinsents has been paid £8,332 ($10,726) for advice on matters including business sale agreements.
London firm iLaw Legal Services was instructed to provide support in respect to debtor collections and was paid £16,547 ($21,302) for its work during the six-month period.
The firm’s main creditor, Barclays, was paid £700,498 ($901,774) during the period. The bank has received £6 million ($7.72 million) in total payments so far, although this remains some way off the total value of its security over the firm’s assets, which stands at more than £16.5 million ($21.24 million).
Greenberg Traurig and DLA Piper have paid the most for teams they recruited prior to the collapse, paying out £1.3 million ($1.67 million) and £1.1 million ($1.42 million) for accountants receivable and work-in-progress. Meanwhile, KWM has paid £956,250 ($1.2 million) for the assets it retained in the wake of the collapse.
Following the high-profile collapse of the legacy SJ Berwin business, the firm relaunched a new Europe and Middle East operation led by a group of partners who agreed to stay on with the firm in the wake of the collapse. Last month, litigation partner Darren Roiser was appointed as its new London office managing partner.
Former partners in the firm’s failed European and Middle East operation have faced further delays recently in finding out whether they are eligible for a tax rebate from HM Revenue & Customs, with many receiving penalty notices from the tax department in recent months.
Ex-partners in the legacy SJ Berwin business received an email in July stating that individual tax loss allocations—which can be used to offset the failed business’s losses against tax either owed or paid on individual earnings—need to be recalculated following a series of mistakes.
The email represented the latest in a string of setbacks in allocating losses.