Two years after the collapse of King & Wood Mallesons (KWM) the saga rumbles on, with administrators primed to pay former staff as an £18.3m funding deficit leaves unsecured creditors out of pocket.
A progress report filed last week details how some former employees of the firm have been ranked as preferential creditors following KWM’s 2017 insolvency. These employees will now be eligible for successful claims on failing to consult on the redundancy process, as well as payouts on wages and holiday pay.
Though among former partners there is a lingering sense of apathy regarding the latest report, with one former KWM partner telling Legal Business: ‘I’ve not actually read the latest report or been sent it. In truth I’ve not been following any updates on it for a while.’
The firm’s unsecured creditors will likely be more concerned, however. Quantuma, who received a 12-month extension to its role as administrators of KWM in January last year, has set aside £600,000 for unsecured creditors, the maximum possible based on the collapsed firm’s assets.
However, the 159 claims received from unsecured creditors totals £18.9m, leaving a multimillion-pound shortfall. The firm’s sole secured creditor is banking giant Barclays, who to date has received £6.5m, with £500,000 paid between 17 June 2018 and 16 January this year.
Having first begun in January 2017, the administration was extended by 12 months in January 2018, while in January of this year it was extended once more as KWM’s dispute with Standard Chartered over unpaid fees held up the process.
Meanwhile, former partners of the firm are still wrestling with tax issues following the collapse of its European arm, meaning further delays to rebate payments. Despite this, none of the former partners Legal Business approached had seen the most recent report.
In September 2017, 288 former KWM employees were awarded over £1m by an employment tribunal which settled claims after the collapse, as it was deemed KWM failed to properly engage in a formal redundancy consultation. The latest report states the administrators are currently calculating and distributing the money owed to other former employees, with the KWM story set to continue for some time.