A senior partner from King & Wood Mallesons (KWM) Frankfurt office has agreed to join McDermott Will & Emery, with the future of the European arm of his former firm in doubt after it filed for administration in December last year.

KWM senior partner Michael Cziesla, who focuses on corporate transactions, has been recruited by the US firm’s branch in Germany’s financial centre. Associate Norman Wasse has also made the switch, joining his new employer as counsel.

Cziesla is the latest in a slew of partners who have left KWM in Europe since a recapitalisation plan to save the firms indebted regional business failed last year. Among the other recent German departures were funds head Sonya Paul’s move to Clifford Chance, Sabine Schomaker and Clemens Niedner’s defection to TaylorWessing, and Lars Reubekeul and Florian Biesalski’s hire by DLA Piper.

KWM is the result of the merger of three legacy firms: China's King & Wood, Australia’s Mallesons Stephen Jaque, and UK firm SJ Berwin. The firm operates under the Swiss verein model, meaning offices are part of regional entities in Asia, Australia and Europe which operate under the same name but are not financially integrated.

In late 2016, reports of KWM’s European offices' financial difficulties began to appear. The group had significant debt and were surviving on a €35 million credit facility from Barclays. When the bank became concerned about the company’s liabilities and called in some of the debt, the firm devised a bail-out plan where its Chinese offices would provide £10 million and the European partners would collectively provide £14 million.

The plan failed. In a vote on the proposal, only 20% of partners supported it and in the lead-up to the vote four senior partners said they intended to leave.

Several international firms – Addleshaw Goddard, Dentons, DLA Piper – considered acquiring KWM’s European business but failed to reach a mutually satisfactory agreement and the firm entered administration in an attempt to protect the business from creditors.

The Swiss verein model shelters the firms Asian and Australian arms from administrators, and before filing KWM sought to preserve its German offices, incorporating new limited liability partnership, KWM Deutschland, for the branches to operate under. By hiving off its offices in Frankfurt and Munich the firm hopes it can retain a presence in Europe.