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Barclays takes more security over KWM assets with second debenture

Barclays has moved to take extra security over King & Wood Mallesons‘ assets with a second debenture, Companies House records show.

Dated 5 December, the charge details Barclays as first in line for more of KWM’s assets covered by the charge, including secured liabilities, interest and charges (land, shares, securities, intellectual property, existing accounts, equipment and goodwill among others).

The debenture puts further financial pressure on the firm’s EUME arm, which has suffered many high-profile partner exits and  is carrying more than £30m in debt.

A KWM spokeswoman said: ‘We continue to work closely alongside our financial advisers with the full support of Barclays Bank and have no further comment to make.’

Yesterday (6 January), Legal Business revealed Addleshaw Goddard has hired KWM’s former managing partner William Boss, as well as property partner Simon Tager and commercial real estate partner Michael Scott, alongside associate Luke Harvey who joins as partner.

Last week it was also reported that KWM’s head of litigation Craig Pollack is in talks to move to US firm Covington & Burling. If he leaves he will be the latest in a long line of defects from KWM’s European business, following heavyweight biller Michael Halford who has recently joined Goodwin Procter alongside funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day have also recently been confirmed to have joined Proskauer Rose, the pair giving notice alongside Halford and Jonathan Pittal. Their notice caused KWM to halt its recapitalisation plans back in October.

Following the quartet’s resignations and failed merger talks with Morgan, Lewis & Bockius, the European partnership looked to its Chinese and Australian arm for a rescue deal. The deal required around 60% of the European partnership to commit to a 12 month lock-in and a contribution of around £14m in capital.

This meant around 70 of 120 partners had to agree. However, this was not successful, as only 21 partners agreed to the deal. The firm is now exploring its options, with a merger or pre-pack administration reported as two of these options. Since then, Dentons emerged as a suitor to take the entire European partnership.

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