Staff at King & Wood Mallesons‘ (KWM) European partnership will be left without salary payments following the breakdown of negotiations with Barclays.
KWM Europe and Middle East managing partner Tim Bednall sent a memo to all staff confirming the firm would no longer be able to pay any salaries.
The message from Bednall states: ‘Barclays, our bankers, indicated to me on Thursday evening that they are not willing to approve the salary payments due to you. I made a proposal to the bank on Friday to counter this, asking that essential payments including salaries by paid.
‘This proposal was rejected on Friday. I made further proposals to ensure salary payments could be made on Sunday and this, also, was rejected. A final proposal was submitted to the bank last night and, with deepest regret, this too was rejected this morning.’
Last week, Legal Business revealed the firm had halted pay for 100 staff as it prepared for administration. Those employees were notified of the decision on 3 January, their first day back after the Christmas break.
KWM filed a further notice to appoint administrators today as partners continue to make arrangements and leave the firm.
The previous notice has expired, having been valid for ten working days since 22 December when it was filed.
The new extension will give the firm’s various suitors more time to finalise deals to take on parts of the legacy business, including agreements about work in progress within already announced team moves such as those going to DLA Piper, Greenberg Traurig, Baker & McKenzie, Reed Smith and KWM’s Chinese arm.
However, the second notice may not necessarily last for another ten days, as such notices can be halted at any point by the firm or its creditors.
In London, the KWM’s Chinese arm is reportedly targeting the banking, corporate and litigation teams.
matthew.field@legalease.co.uk
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