Bankrupt former KPMG partner sues law firm over job loss

A previous KPMG husband or wife who went bankrupt just after investing in French ski chalets is suing regulation firm Herbert Smith Freehills for allegedly leading to him to eliminate his work by tipping off the accounting team about his credit card debt difficulties when he asked for authorized suggestions.

Graham Martin, a companion at KPMG Singapore, requested Herbert Smith to characterize him in July 2017 after loan companies secured a around the globe freezing purchase against him and sued for money owed of £3.26mn joined to his financial commitment in three chalets in Chamonix.

Martin has filed a £22mn legal claim versus Herbert Smith in the Substantial Court docket in London right after it shared facts of his chance of personal bankruptcy with KPMG — a consumer of the business — which he alleges brought on him to get rid of his job.

In court docket paperwork found by the Monetary Moments, Martin reported Herbert Smith experienced opted to “please and procure favour” with its prolonged-term client KPMG “rather than comply with its obligation of loyalty” to him. Martin accused Herbert Smith of breach of fiduciary obligation, carelessness and breach of assurance.

Herbert Smith, which turned about additional than £1bn in the yr finished April 2021, is among the the largest worldwide law corporations primarily based in London.

The business mentioned: “Mr Martin’s declare has no benefit and the agency will defend it vigorously.” It will file its defence to the declare subsequent month.

According to the claim, Martin hired Herbert Smith in a individual ability in July 2017 to battle a legal motion introduced towards him by loan provider Creditforce soon after he borrowed money to acquire the chalets, which later on contributed to his bankruptcy.

Martin, a restructuring adviser at KPMG Singapore, asked Herbert Smith husband or wife John Corrie to defend him in a Substantial Courtroom hearing about the freezing get.

The lawsuit alleges Martin instructed Corrie he did not want KPMG to know about his economic problem until finally he had reached a settlement with Creditforce, but that on the identical working day that Martin despatched him papers relating to his debts, Corrie advised KPMG’s London business about his client’s financial debt difficulties and subsequently advised them that the freezing purchase was in area.

KPMG then passed this details to its Singapore office environment, which include the danger Martin would be created bankrupt.

Martin’s lawful claim summarises Herbert Smith’s placement as being that Corrie explicitly obtained Martin’s consent to notify KPMG that the firm was intending to represent him regarding the debt difficulties — a little something Martin denies. Corrie is not named as a defendant in the situation.

Right after KPMG Singapore was instructed about Martin’s fiscal predicament, he was termed into a collection of conferences with the firm’s administration, at which he asked for time off, prior to he was stripped of his management positions, in accordance to his declare.

Martin, who attained a settlement with Creditforce in this period of time, stated he attempted suicide after being removed from his leadership roles.

He promises he was remaining with no option but to resign in February 2018 and that he could have held his career if he had been equipped to crack the information of his economical scenario to KPMG himself following he attained a settlement with his loan provider.

He was subsequently manufactured bankrupt in June 2018.

Corrie, Martin and KPMG declined to remark.