You will have heard from your Employee Representatives on Thursday that salaries were due to be paid on Friday last or yesterday. I am very sorry to have to tell you that this payment will not be paid, and no further salary payments will be made (with the exceptions set out below).
Barclays, our bankers, indicated to me on Thursday evening that they were not willing to approve the salary payments due to you. I made a proposal to the bank on Friday to counter this, asking that essential payments including salaries be paid. This proposal was rejected on Friday. I made a further proposal to ensure salary payments could be made on Sunday and this, also, was rejected. A final proposal was submitted to the bank last night and, with deepest regret, this too was rejected this morning.
— Tim Bednall, the managing partner of the European arm of King & Wood Mallesons, explaining in an internal email sent to staff members that they would not receive their paychecks because Barclays refused to authorize further payment. All staff members at the firm have worked for free since the start of the new year, and will now be forced to apply to the firm’s administrators to claim their pay. The firm has struggled since other Biglaw firms began poaching partners, and has since filed a notice to appoint administrators.
Staci Zaretsky is an editor at Above the Law. She’d love to hear from you, so feel free to email her with any tips, questions, or comments. You can follow her on Twitter or connect with her on LinkedIn.