Barclays is putting its foot down and has issued deadlines for former partners of King & Wood Mallesons’ failed Europe, UK, and Middle East (EUME) business to repay loans taken out for capital contributions.
The financial giant sent out letters received by former
KWM EUME partners in the first week of April, according to reports from
Legal Week and
Legal Business. Former partners have until the end of this month to repay loans or risk getting a default notice, the letters reportedly said.
However, at least one partner has said that the bank bungled the initial communication it sent out to former partners in February. A source told Legal Week that the letter stated how much was owed and asked for a repayment plan from the former partners.
“Barclays cocked it up internally with these loans, and did not respond to our letters asking for payment schedules. Instead they sent a demand straight away,” one former partner told
Legal Business.
Partners reportedly replied with queries after the first round of communications, but the bank did not respond. One source said that the person who handled the matter for Barclays “fell ill.”
Both publications cite sources saying Barclays, given their knowledge of the finances of the legacy SJ Berwin practice, may not have been wise to keep approving loans for capital contributions last year.
Creditors could lose £33.5m from the collapse of KWM’s EUME partnership. Barclays could possibly take the biggest hit with a valid claim to more than £16.5m, £13m of which is unsecured, according to reports last month.
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