UK partners at KWM were told today that the firm has debts out of which it is unlikely to trade. And four top partners immediately jumped ship.

An insider says that partners were told today that they have £35m of debt. Apparently CMS and a bunch of other businesses were at the meeting to advise. This sort of debt would not normally be a problem for a major firm, but 54 partners have left over the last year. Four of them today, including Rob Day, former Managing Partner.

There is a question mark as to whether partners will get back their capital contributions. Our source says they won't, and some face bankruptcy. Hundreds of employees will lose their jobs if the former SJB can't find a lifeline. 

It's just tragic. SJB was a cracking City institution, it shouldn't collapse like this. The death spiral can be blamed on the firm's Far Eastern paymasters who didn't understand it and frankly didn't care very much until it went so wrong there was no turning back, and a raft of UK partners who fled and feathered their own nests, causing a run on the bank. Awful.

Read more tomorrow.