An initial report into King & Wood Mallesons‘ now defunct European arm states unsecured creditors are expected to lose £33.5m as administrators Quantuma continue to sift through the affairs of legacy SJ Berwin.
The firm was moved into administration in mid-January, in what was Europe’s largest ever legal collapse. The report says £37m is owed to unsecured creditors, but only £3.5m was available at 17 January.
Barclays, which is listed as having both secured and unsecured debt, has £13m of debt which is unsecured. The report says of its total debt, Barclays has a valid security over £16.5m, which the joint administrators’ lawyers are reviewing as per standard procedure. It is not yet clear how much of this money will be recovered.
Of the unsecured creditors, £6.8m is owed to trade creditors, just over £3m for premises and £985,000 to HMRC. Former members of the LLP are also still owed £12.6m.
The report states that Quantuma has recovered £6.7m from sales of parts of the business, such as to DLA Piper, Reed Smith, Greenberg Traurig and other purchasers, and made payments from this of about £1.6m to pay for the administration. This means about £5.02m has been recovered for Barclays as at 10 March 2017.
The report says in the five months to 30 September 2016, KWM’s European arm had an operating profit of £9.3m, while it profit had stood at £52.3m for the 12 months to April that year, a fall from £63.8m in April 2015.
While in early 2016 legacy SJ Berwin had more than 160 partners and 900 staff in Europe, its collapse meant its partnership headed to more than 20 firms by January 2017.