Barclays demands payment of capital loans from former KWM partners

Barclays
Barclays has demanded that former King & Wood Mallesons (KWM) partners repay personal loans taken out to pay capital contributions by the end of this month.

The bank initially sent a letter asking former partners to repay their loans in mid-February, a month after the legacy SJ Berwin business went into administration on 17 January.

In the letter, the bank requested partners put forward a payment plan for outstanding amounts.

Partners then received another letter in the first week of April, demanding repayment by the end of this month.

One former partner said: “They first sent a letter that said: ‘You owe us this money, come up with a proposal on how you will pay us back.’ Now it’s changed to final demands.”

One former KWM partner estimated that the individual loans range from £75,000 to £200,000, saying: “I think as the administration has gone on, Barclays has had a change of policy. Maybe they wanted…to be able to demonstrate they weren’t aggressive to start with.”

Barclays filed two debentures giving it greater control over KWM’s assets last year, before refusing salary payments to KWM staff one week before the firm’s European arm collapsed.

One former partner added: ”Barclays are a commercial organisation who lend money and they can recover it when the loans aren’t paid. We are where we are because of the firm’s management, not Barclays. Having said that, should Barclays have taken money off any junior partners who joined in the last 12 months, knowing what was going on at the firm? If I was a junior partner who had been offered a loan by Barclays I would be resentful.”