Eight months on and the King & Wood Mallesons (KWM) saga continues, with a progress report filed this week revealing the cost of the firm’s European administration amid confirmation that ex-staff are set to receive a payout.
According to a report filed by administrator Quantuma at Companies House on 5 September, CMS Cameron McKenna received a total of £826,740 for ‘assistance in attending to the complex legal issues which have arisen both in the pre and post administration periods’. This figure also includes costs of £235,544 incurred by the firm in dealing with KWM’s German offices while additional legal fees of £186,318 go to Pinsent Masons for advising the administrators as well as £70,000 to iLaw Legal Services.
The report also shows the amount paid to Barclays, KWM’s main secured creditor. The report states: ‘The joint administrators instructed their legal advisers to conduct a review of the bank’s security… valued at £16,557,222.’ A total of £4,473,767 has been paid to Barclays so far in three separate instalments.
Included by Quantuma are the costs owed by numerous law firms including KWM 2.0, DLA Piper and Baker McKenzie. KWM 2.0 paid £75,000 for numerous assets in January – however, the firm still owes £881,250. DLA Piper still owes £521,000 after making a payment of £419,000 in May this year while Baker McKenzie made a full payment of £103,603 in January.
Additionally the report lists numerous miscellaneous costs including everything from artwork to mobile phones. It is revealed that the firm’s mobile phones have been sold for a total of £5,780; £4,000 has been paid to Hector Patterson & Co in regards to the valuation of KWM’s artwork displayed throughout their premises and a total of £26,515 was paid to Clear it Solutions for clearance of KWM’s offices.
Tim Bednall, KWM’s former managing partner, was paid £25,380 to be ‘instructed as the joint administrators’ agent in order to advise and assist’ due to his knowledge of the firm’s clients. This was agreed on a fixed-fee basis.
News of the administration’s progress comes as KWM’s staff have accepted a financial settlement offered by Quantuma after conceding a ‘technical breach’ occurred in the required UK redundancy consolation period.
The proposed settlement constitutes eight weeks’ pay, capped at £479 per week per person. An email sent to around 200 staff from the group’s solicitors Herrington Carmichael said that following discussions with the Redundancy Payment Office, the firm would apply to the Employment Tribunal for the judgement by consent agreed between the parties. The email added: ‘We were delighted to receive full acceptance of the proposal from all claimants and, therefore, have now made the required application.’
This week’s news is the latest update in the acrimonious collapse of the European practice of KWM, which is formed by the legacy SJ Berwin. The SJ Berwin business, which remained a separate partnership after combining with KWM in 2013, collapsed in December 2016 with debts of over £30m after a string of senior departures. It was the largest failure to ever hit Europe’s legal market.
