Five top corporate restructuring partners at KPMG Ireland and Deloitte Ireland have handed in their notice and plan to join forces to set up an Irish operation of UK-based debt restructuring boutique Interpath Advisory, according to sources.
KPMG Ireland's 4,000 staff were told on Friday afternoon that corporate restructuring partners Kieran Wallace and Eamonn Richardson will resign with effect from the end of April 2023. It did not comment on the future plans of the two men.
The firm has appointed Mark Collins, its head of deal advisory, as the new lead of its restructuring and forensics business unit with immediate effect. The division has about 120 staff. "The firm is fully committed to the future of this business, a core element of its multidisciplinary strategy, and it is very ambitious for its continued success," KPMG Ireland said.
Sources said that Deloitte partners Ken Fennell, Mark Degnan and James Anderson have also quit that firm to set up Interpath Advisory Ireland. A spokesman confirmed that the three men will resign with effect from the first quarter of next year.
Mr Fennell and Mr Wallace were the heads of restructuring at their respective firms.
There have also been tentative discussions about a potential deal whereby Deloitte Ireland’s restructuring division, which has about 60 staff, could ultimately move to Interpath Advisory Ireland, the sources said.
“An amicable engagement process has commenced, focused on the needs of clients and staff of our restructuring business over the 12-month notice period,” the Deloitte spokesman said, declining to comment further.
It is understood that the five men – who between them have been involved in some of the biggest corporate insolvency cases in the State in recent times – notified their firms of the plans to resign in the middle of last month.
This is the most significant development in the lucrative Irish corporate insolvency sector in decades.
Interpath Advisory was established in May last year as KPMG in the UK sold its corporate restructuring business, including 22 partners and 528 staff, to private-equity firm HIG Capital for more than £350 million (€414 million).
The sale of Interpath allowed the restructuring business to continue to win work from the Big Four firm’s audit clients as it removed the risk of conflicts of interests at a time of heightened regulatory oversight of the sector.
Last year also saw Deloitte UK’s restructuring services unit, comprising 250 staff, including 27 partners, being acquired by US public relations and advisory firm Teneo.
Mr Wallace and Mr Richardson have been the joint liquidators of Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank, since it was put into wind-up in 2013. Mr Wallace is also the liquidator of the Irish arm of New Zealand-based insurer CBL Corporation and failed investment firm Custom House Capital. Mr Richardson is a joint liquidator of Joe Walsh Pilgrimtours.
Mr Fennell and Mr Anderson are the joint liquidators of the Irish arm of German payments company Wirecard, which collapsed in 2020. Mr Fennell and Mr Degnan are joint liquidators of Stobart Air.
Industry sources said that any outstanding liquidation cases would move with the individuals to their new practice, as they are court-appointed officials in each instance.
The plan by the five men to set up Interpath Advisory Ireland comes at a time when insolvency practitioners are preparing for a spike in debt restructurings and corporate wind-ups over the next 18 months.
Corporate insolvencies dropped by 30 per cent last year, to 401 cases, as Government supports for businesses during Covid-19 concealed the extent of distress across many businesses, according to a recent Deloitte report.
“Whilst one might have anticipated an upward trend in insolvencies in 2021, given the significant number of businesses that have been directly or indirectly affected by the pandemic, it is evident that the full economic effect of Covid-19 on the Irish economy still has yet to fully materialise in terms of the total number of corporate insolvencies,” the Deloitte report said.