Former bankrupt KPMG partner sues law firm over job loss

A former KPMG partner who went bankrupt after investing in French ski chalets is suing law firm Herbert Smith Freehills for allegedly causing him to lose his job by telling the accounting group about his debt troubles when he sought legal advice.

Graham Martin, a partner at KPMG Singapore, asked Herbert Smith to represent him in July 2017 after lenders secured a global freeze order against him and sued for £3.26million debts linked to his investment in three chalets in Chamonix.

Martin has filed a £22million lawsuit against Herbert Smith in the High Court in London after he shared details of his bankruptcy risk with KPMG – a client of the firm – who he claims made him to lose one’s job.

In court documents seen by the Financial Times, Martin said Herbert Smith chose to “please and curry favour” with his longtime client KPMG “rather than comply with his duty of loyalty” to him. Martin accused Herbert Smith of breach of fiduciary duty, negligence and breach of trust.

Herbert Smith, which made over £1bn in the financial year ending April 2021, is among the largest London-based international law firms.

The company said: “Mr. Martin’s claim is without merit and the company will vigorously defend it.” He will file his defense to the claim next month.

According to the claim, Martin hired Herbert Smith on a personal basis in July 2017 to fight a lawsuit brought against him by lender Creditforce after he borrowed money to develop the cottages, which later contributed to his bankruptcy.

Martin, a restructuring adviser at KPMG Singapore, asked Herbert Smith’s partner John Corrie to defend him in a High Court hearing over the freezing order.

The lawsuit alleges that Martin told Corrie that he did not want KPMG to know about his financial situation until he reached a settlement with Creditforce, but that on the same day Martin sent her documents relating to his debts, Corrie informed KPMG’s London office of his client’s situation. debt issues and then told them the freezing order was in effect.

KPMG then forwarded this information to its Singapore office, including the risk that Martin could be put out of business.

Martin’s legal claim sums up Herbert Smith’s position as being that Corrie explicitly received Martin’s consent to tell KPMG that the firm intended to represent him regarding debt issues – which Martin denies. Corrie is not named as a defendant in the case.

After KPMG Singapore was made aware of Martin’s financial situation, he was called into a series of meetings with the company’s management, during which he asked for leave, before being removed from his management position. , in his words.

Martin, who struck a deal with Creditforce during that time, said he attempted suicide after being removed from his leadership role.

He claims he had no choice but to resign in February 2018 and could have kept his job had he been able to disclose his financial situation to KPMG himself after reaching an agreement with his lender .

It was then filed for bankruptcy in June 2018.

Corrie, Martin and KPMG declined to comment.

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