Legal Business

Greenberg reveals list of European relationships gained through KWM hires

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Strategic recruitment Greenberg TraurigKing & Wood Mallesons

Following the collapse of King & Wood Mallesons‘ (KWM) European arm last week and the lateral moves of all but 33 of its partners, Greenberg Traurig has confirmed CBRE, Westfield and British Airways’ Pension Fund have followed a six-strong group of former KWM partners to Greenberg as new clients.

Others in the list that Greenberg will now advise include Brockton, Cain Hoy, Europa Capital, M3 Capital, Paloma Capital, Revcap and Rockspring.

The group joined Greenberg in late December and includes real estate funds partners Steven Cowins and Marc Snell, real estate partner Matthew Priday, corporate finance partners Michael Goldberg and David Fitzgerald, and tax partner Clive Jones and their respective teams.

The Crown Estate, another one of Cowins’ (pictured) key clients, announced earlier this month that following a review process last year it has given Berwin Leighton Paisner (BLP) the sole mandate for its £7bn Central London property portfolio. The Crown Estate has not been named as a new client by Greenberg.

Greenberg executive chairman Richard Rosenbaum said: ‘We are pleased to see that our strategy of delivering excellence and value in both real estate and funds across the firm attracted these top tier lawyers to our London office.’

‘We are of course excited that world class, sophisticated companies of this nature would choose to follow, and are committed to serving them as the very important clients they are,’ he added.

The list represents mostly clients that were brought on by Cowins, whilst some clients went to Greenberg through other team members.

According to Ashfords partner Sam Palmer, who as solicitor manager to legacy SJ Berwin’s administrators Quantuma has been dealing with the orderly transfer of client files since the practice went into administration, only around 5% of clients decide not to follow partners to their new firms and decide to take their work in progress elsewhere.

While Greenberg is adding to its books, Quantuma released their first interim report to creditors earlier this week. This concluded that partner exits accelerated the demise of legacy SJ Berwin practice, and begins an investigation into the firm’s previous financial practices.

georgiana.tudor@legalease.co.uk

Legal Business

‘The only resort’: KWM administrators’ interim report says partner exits hastened demise of legacy SJ Berwin

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Partnership King & Wood Mallesons

Joint King & Wood Mallesons (KWM) EUME administrators Andrew Hosking and Sean Bucknall of Quantuma have said partner exits accelerated the demise of the practice in their first interim report to creditors.

Quantuma said in a statement: ‘Administration was the only resort left to the firm, which saw an accelerating rate of partner and staff departures during 2016 as the extent of the firm’s financial difficulties became apparent.’ The report also reveals KWM sold its Spain business to the partners.

Hosking and Bucknall were appointed on 17 January when the firm entered administration.

Their report reveals that seven partners and their work in progress (WIP) and accounts receivable had already transferred to Goodwin Procter on 10 January. The sales the administrators completed after their appointment included six partners, WIP and accounts to Greenberg Traurig, eight to DLA Piper, 11 to KWM China and 12 to Reed Smith.

The report reveals that on an individual basis, KWM has now entered into agreements with approximately 40 partners for their departure, agreed to by the administrators. It also shows that at 30 April 2016 KWM comprised of 163 partners and over 900 staff, generating revenues of approximately £177 million to that date, with the majority of revenue and profit deriving from the UK, France and Germany. It also says AlixPartners were originally planning to be adminstrators but pulled out due to lack of funding.

Hosking (pictured) said: ‘Since we were formally engaged on 17 January we have taken active steps to progress negotiations and agree commercial terms with interested parties who had already expressed interest in acquiring parts of the business.’

He added it was too early to present a full picture of the reasons for the collapse of legacy SJ Berwin but it was clear that, despite attempts to restructure to reduce overheads in early 2016, it had proved impossible to reach agreements on funding and the way forward with partners.

‘By 22 December 2016, it had become apparent that KWM required funding above the level available to it and that it would not be in a position to meet salary costs beyond early January 2017 and to meet the partners’ Schedule D1 tax liability due on 31 January 2017,’ Hosking added.

georgiana.tudor@legalease.co.uk

Legal Business

Reed Smith adds 10% to European headcount with hire of 50 lawyers from KWM

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Strategic recruitment King & Wood MallesonsReed Smith

Reed Smith has hired what is understood to be the largest group of lawyers from collapsed legacy SJ Berwin in a move which adds 10% to its European headcount.

The US firm has hired 50 fee-earners, including 17 partners, three counsel, 22 associates, one jurist and seven trainees, nine other support staff.

In London, the firm hired financial regulatory partners David Calligan, Tim Dolan, Tamasin Little and Adrian Brown, corporate partners Delphine Currie and Mark Sanders, private equity partner Laura Brunnen and tax partner Gareth Amdor.

The former KWM financial services regulatory team led by Calligan advises banks, funds, real estate, private equity and retail banking, as well as advising on structured finance matters.

In Paris, Reed Smith is joined by seven partners including competition and antitrust partners Marc Lévy and Natasha Tardif, tax partners Sylvie Vansteenkiste, Fanny Combourieu and Raphaël Béra and corporate and private equity partners Guilain Hippolyte and Pierre-Louis Périn.

In Germany, Reed Smith will be joined by competition and antitrust partner Tilman Siebert (in Munich) and litigation partner Francis Bellen (in Frankfurt). According to the firm, the two teams will work closely together on major cartel damages cases and other contentious competition matters, representing global corporates, financial institutions and private equity houses.

The partners and their teams are expected to join the firm on Monday 23 January and follow several lawyers and business services personnel who have already joined the firm on Monday 16 January. The 50-strong group represent many of the same clients as Reed Smith, and the teams are understood to bring with them clients ‘in the multiple double digits’.

‘It is a mutually rewarding opportunity,’ said Tamara Box, managing partner for Europe and the Middle East.

Box added: ‘These teams recognised that our global platform, strong collegiate culture, and high quality client base were a good fit for them.’

The US firm had been in discussions with the partners for a few weeks and has been through ‘robust internal processes’ since early December, before KWM filed a notice to appoint administrators on December 22.

‘We found these KWM partners really stood out in the process as being very collaborative and team oriented, having clearly built sustainable businesses within their teams by working really well together. That was ultimately what helped us hone in on them, alongside the fact that they stood head and shoulders above others in terms of advancing our strategic priorities,’ said Box.

She also explained that partners were independent in the process, all pursuing opportunities at various firms. Reed Smith’s conversations with KWM were more about smooth transition of work and clients.

‘It was a pretty opaque process, but we are aware that partners had independent conversations with other firms both within and outside of the process. We believe every single partner had other offers, and in most cases multiple offers,’ Box added.

Read more: ‘Outside the Box: Can Reed Smith’s new Euro heads take the firm’s London practice to the next level?’

Legal Business

KWM 2.0 moves into new offices as administrators begin investigation into collapsed business

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Restructuring King & Wood Mallesons

King & Wood Mallesons‘ (KWM) new business in London, comprising seven partners, has today (20 January) moved into new offices on the 4th floor of St Martins Court, 5 Cheapside in the City.

Established just one day after the firm formally entered administration, the firm’s new business, dubbed KWM 2.0 and consisting of offices in London, Frankfurt, Dubai and Riyadh (alongside affiliated entities in Milan, Brussels and Madrid) will each operate as separate financial entities, but remain part of the verein structure. They have each received financial support from KMW China, in different ways, according to local regulations.

Meanwhile, the administrators Quantuma and solicitor manager Sam Palmer, head of professional and financial risk at Ashfords expect to have the old 10 Queen Place Street offices cleared and client files transferred by next Monday 23 January. Palmer had sent an email yesterday reminding lawyers of their professional obligations with regards to the transferring of client files which she said had a positive response.

The first report, called a Statement of Insolvency Practice (SIP) 16 will be lodged by the administrators within seven days from the day the firm formally entered the process, due by Tuesday 24 January.

Quantuma partner Andrew Hosking, appointed as joint administrator the legacy SJ Berwin practice, now called QSP Residual Recoveries LLP, said initial investigations showed there were ‘some concerns’ around accounting treatments used, but added it is too early to give more detail on the matter.

Hosking said: ‘There are a number of aspects which concern me and I will perform my investigation and work with larger creditors.’

According to the administrators the major creditors include Barclays bank, 10 Queen Street’s landlord, and a number of finance companies. More information on the creditors will also be provided in due course.

The administrators had initially kept 70 KWM staff to help with the process and investigation, which is now down to 53 and the number is to further diminish as work progresses and as the premises vacate.

The administrators said the first priority is the seamless move of client files and monies which solicitor manager Palmer is currently overseeing.

Palmer said: ‘KWM is the largest regulatory failure of its kind, for financial reasons. The priority is to get the client money out of the accounts as soon as possible, and in the most seamless manner. These are significant balances.’

Hosing added: ‘This was a law firm turning over almost £200m which sadly imploded and the way it did raises concerns about how it happened. People need to be assured that the administrator is going to be fair and balanced.’

Partners remaining with KWM China include:

Joseph Newitt – corporate (London)

Greg Stonefield – corporate (London)

Mike Wang – corporate (London)

Vanessa Docherty – finance (London)

Dorothy Murray – disputes (London)

Darren Roiser – disputes (London)

Andrei Yakovlev – disputes (London)

Christian Cornett – corporate (Frankfurt)

Rudolf Haas – banking & finance (Frankfurt)

Ruediger Knopf – tax (Frankfurt)

Sandeep Dhama – corporate (Dubai)

Ghassan El Daye – disputes (Dubai)

Joanne Strain – international arbitration (Dubai)

Tim Taylor QC – international arbitration (Dubai)

Majed Almarshad – corporate (Riyadh)

Glenn Lovell – corporate (Riyadh)

George Pinkham – corporate (New York)

Legal Business

KWM’s global chair sets out plans for new European business after SJ Berwin collapse

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Restructuring King & Wood Mallesons

King & Wood Mallesons (KWM) announced today (18 January) that it has already established a new business presence with 30 partners in the UK, Europe and the Middle East, effective immediately. The statement comes after legacy practice SJ Berwin went into administration yesterday.

The firm’s global chairman said this presence has been established to ‘service the needs of global clients’ and will include practices in London, Frankfurt, Dubai and Riyadh, and affiliated offices in Madrid, Milan and Brussels.

The new European platform will focus on corporate M&A, finance, competition and dispute resolution and comprises of more than 30 partners, their associates and support staff.

It is understood the new business will continue to operate under a verein structure. As reported by Legal Business on 12 December last year, the firm had also established a new LLP, KWM Deutschland.

KWM global chairman Junfeng Wang said: ‘I am proud and excited by the determination of our partners who have worked so hard with us to realise this practice in deeply challenging circumstances. This is a very good outcome for international clients and for the continued development of our firm.’

Wang (pictured) said: ‘This positive outcome will enable the firm to provide high quality service to international clients in key markets and provides a strong platform for further, international growth in EUME and beyond,’ he added.

Yesterday, corporate recovery and restructuring specialists Quantuma confirmed its appointment as KWM’s administrators at the High Court in London. A statement from Quantuma said both KWM’s LLP, or partnership, had gone into administration as well as KWM EUME Services, which holds the employees.

Quantuma partners Andy Hosking and Sean Bucknall are administrators for both LLPs while others assisting for KWM EUME Services are Simon Bonney and Carl Jackson. Samantha Palmer of Ashfords has been instructed as the appointed solicitor manager to deal with client monies and to ensure their interests are protected. The administrators are being co-advised by Rita Lowe of CMS Cameron McKenna and Steven Cottee of Pinsent Masons.

‘We are examining the position closely and exploring ways forward with a view to achieving the best possible return for creditors.’ Hosking said.

‘Regrettably there will be redundancies but at this stage it is still too early to specify how many. A small number of employees will be retained for a period to help with the administration,’ he added.

georgiana.tudor@legalease.co.uk

Legal Business

It’s over: King & Wood EUME moved into administration in Europe’s largest-ever legal collapse

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Europe King & Wood Mallesons

Almost three months after King & Wood Mallesons‘ (KWM) European arm halted a recapitalisation programme that would ultimately fail, the legacy SJ Berwin partnership, which has been carrying more than £30m in debt, has moved into administration.

Andrew Hosking and Sean Bucknall from restructuring company Quantuma have been appointed as administrators to the EUME entity, after legacy SJ Berwin filed a notice to appoint administrators before Christmas, and extended it in January. The European arm’s major creditor Barclays tightened security over borrowings last August with a debenture, and beefed up provisions with another before the end of last year. Last week managing partner Tim Bednall blamed the bank as he told staff they would cease being paid.

Since the resignations of Michael Halford and three other heavyweights in October last year, the majority of the KWM EUME’s 50 top billers have resigned from the partnership, which failed to agree a recapitalisation plan in November despite support offered by from its Asia Pacific partnership. Legacy SJ Berwin merged with China’s King & Wood and Australia’s Mallesons in November 2013.

With merger talks with Morgan Lewis & Bockius coming to an end, talks with various other suitors such as Dentons also came to nothing. However KWM is likely to still maintain a presence in London and several European locations, having registered a separate LLP ‘KWM Deutschland’, so that the firm can maintain its global reach.

Various firms have benefited from KWM’s demise, the most prominent being Goodwin Procter, which took the firm’s prized funds team, headed by Halford and included 25 other lawyers in the City as well Paris heavyweight Arnaud David. The group of leavers is worth almost £15m in billings and follows the April 2016 exit of a KWM team in Paris worth £8m of billings. This equates to around 13% of KWM’s European revenue of £181.3m.

Other US firms who took on key partners include Greenberg Taurig, which nabbed big biller Steve Cowins, who joined with four other partners and their teams, while Reed Smith, under ambitious new EUME managing partner Tamara Box, is likely to take one of the largest groups of partners, fee earners and staff in London, Frankfurt and Munich.

Mid-tier firms to take on heavyweight partners include DLA Piper which took on real estate partner William Naunton and his team, while Addleshaw Goddard has former managing partner William Boss and several members of his team.

Meanwhile, the firm’s Cambridge office has moved to Bircham Dyson Bell, and a raft of other firms including Dentons, Bird & Bird, Taylor Wessing, Stephenson Harwood, Fieldfisher, Debevoise & Plimpton, Osborne Clarke and Baker & McKenzie have all picked up partners.

The folding of legacy SJ Berwin eclipses the collapse of Manchester’s Halliwells, which was Europe’s largest legal failure when it entered administration in 2010 owing about £30m to more than 500 creditors. 

georgiana.tudor@legalease.co.uk

Read more on KWM in ‘Comment: The moment of truth arrives in the SJ Berwin saga’

For an in-depth assessment of KWM, subscribers can see our July cover feature ‘Branded’



Legal Business

KWM drops litigation as Goodwin Procter picks up 26 lawyers from troubled firm

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Litigation Goodwin ProcterKing & Wood Mallesons

King & Wood Mallesons (KWM) has dropped litigation against Goodwin Procter and its former corporate partner Richard Lever, as the US firm brings on 26 partners from the legacy SJ Berwin practice.

It is understood KWM partners have voted on the move of six partners, who moved with influential partner Michael Halford alongside 15 associates and five trainees. At the same time the beleaguered firm agreed to drop the litigation claim of approximately £15m.

As reported by Legal Business in July, KWM wrote to Goodwin over potential legal proceedings against it concerning the exit of a six-partner private equity team. The team, which included Paris managing partner Christophe Digoy and Maxence Bloch, is understood to have walked out with at least £8m in annual billings.

Lever announced he would leave KWM in April 2015 to develop a City PE practice at Goodwin, while the Boston-based firm announced the Paris team would join it from KWM a year later.

It is understood KWM was pursuing the claim against Lever and Goodwin’s UK and US arms and while Lever and Goodwin UK had filed defences in the US Goodwin had not, pushing back on jurisdiction grounds. The claim had not yet been listed for hearing.

The other KWM partners following Halford to Goodwin are Ed Hall, Laura Charkin, Shawn D’Aguiar, Patrick Deasy, and Ajay Pathak.

Halford’s exit along with three other influential legacy SJ Berwin partners, Jonathan Pittal, Andrew Wingfield and Rob Day caused the firm to halt and ultimately fail in its plans to recapitalise the business, which is carrying more than £30m in debt.

KWM filed a further notice to appoint administrators earlier this week 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.

It was also revealed staff at KWM’s European partnership would be left without salary payments following the breakdown of negotiations with Barclays.

Both Goodwin Procter and KWM declined to comment.

madeleine.farman@legalease.co.uk

Legal Business

KWM funds architect Blake latest to exit troubled firm

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Strategic recruitment King & Wood MallesonsO'Melveny & Myers

US firm O’Melveny & Myers is the latest to benefit from partner exits at King & Wood Mallesons‘ European arm, as head of funds Jonathan Blake will join the firm.

Blake (pictured), who is considered a pioneer of the legal market for investment funds in Europe, will be assisting O’Melveny in advising private and public funds and institutional investors in private equity.

O’Melveny’s head of investment funds John Daghlian said: ‘Jonathan helped define the private equity industry. I know that his dedication to client service, his energy, and his extensive market knowledge will be a tremendous asset for the firm, and a great addition to our team.’

Formerly senior partner at KWM’s European arm, Blake was the architect of the firm’s pioneering move into private equity funds and lead the firm through the traumatic post-2008 period.

In his role as senior partner he initiated legacy SJ Berwin’s merger deal with a funds counterpart at King & Wood. Stephen Kon, who replaced Blake as senior partner in 2012, executed the deal with then managing partner Rob Day.

Influential funds partner Michael Halford, whose resignation along with several other heavyweights late last year halted the firm’s recapitalisation plans, was considered Blake’s protégé.

Since Halford’s resignation and the firm’s failure to recapitalise the business the legacy SJ Berwin practice has filed a notice to intention to appoint administrators. Quantuma is expected to replace AlixPartners as proposed administrators.

On Tuesday, legacy SJ Berwin filed for an extension to appoint administrators after the previous notice has expired. It had 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.

Meanwhile, staff at the firm will go without pay following the breakdown of negotiations with Barclays.

Earlier this week 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.

tom.baker@legalease.co.uk

Legal Business

Barclays blocks pay for all KWM Europe staff as partnership continues toward administration

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Salaries BarclaysKing & Wood Mallesons

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

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm

Legal Business

KWM latest: European partnership buys more time before administration as Osborne Clarke takes top biller Couter

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Partnership King & Wood MallesonsOsborne Clarke

King & Wood Mallesons‘ (KWM) European partnership has filed a new intention of notice to appoint administrators as the firm continues to leak partners. The previous notice has now 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, 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 Chinese arm is reportedly targeting the banking, corporate and litigation teams.

Meanwhile, Osborne Clarke has made a key hire with top ten biller Rachel Couter. Couter had been a partner at KWM since 2010 and was head of the firm’s contentious financial services regulatory practice.

Her hire follows Osborne Clarke’s appointment of Addleshaw Goddard finreg partner Nikki Worden.

Baker Botts has hired the firm’s head of energy and infrastructure, James Douglass as Mishcon de Reya has also taken on partner Shaistah Akhta to join its disputes team. In addition Squire Patton Boggs has appointed real estate partner John Danahy from KWM, who will be joining the firm’s London office.

Danahy focuses on energy and infrastructure real estate, as well as traditional real estate development and property investment work. His energy sector experience encompasses conventional, renewable and nuclear power, distributed energy networks and rail infrastructure and pipelines.

Separately, Simmons & Simmons also announced it has hired from KWM in financial markets and banking, with co-head of KWM’s Africa group Cindy Valentine and banking partner Jen Yee Chan joining the firm.

Valentine has a core focus on Africa and a strong track record in the private fund formation and investment sector while Chan’s practice focuses on funds finance and general bank lending.

Legal Business reported earlier this week that subject to due diligence, Reed Smith is likely to take on the largest group of partners from the global giant’s beleaguered European arm.

The US firm is talking to partners in France, Germany and London, and has been targeting practices such as financial regulation, funds, tax and private equity.

Among others, it is in talks with KWM’s finreg team in London led by partner David Calligan, M&A specialist Mark Sanders, co-head of funds in Paris Arnaud David, head of tax Sylvie Vansteenkiste and head of EU, competition and regulatory Marc Levy in Paris, among others.

georgiana.tudor@legalease.co.uk