King & Wood Mallesons' (KWM) China arm is in talks to take on large teams of lawyers from the firm's Dubai, Germany, Italy and Spain offices as well as City corporate and litigation teams, with the news coming as former partners have been emailed about potential liabilities they may face relating to the firm's pending January tax bill.

Dubai office head Tim Taylor QC is leading discussions between KWM China and various parts of the struggling European business, according to partners, with KWM China hoping to buy some of the legacy SJ Berwin business in order to retain a small presence across the UK, Europe and the Middle East.

The discussions are not yet a done deal, with some partners involved also receiving interest from other firms.

Details of the discussions come after KWM last week registered a new limited liability partnership called KWM Deutschland with Companies House. Its listed members are Europe and Middle East (EUME) managing partner Tim Bednall, EUME senior partner Michael Cziesla and the King & Wood Mallesons LLP.

The legacy SJ Berwin business – now KWM EUME – also has offices in Belgium, Luxembourg and Paris but it is not yet known what will happen to these. A large portion of the firm's Paris team departed to Goodwin Procter earlier this year, with Goodwin currently involved in a lawsuit brought by KWM over these hires, which included the local office head and five other private equity partners.

EUME managing partner Tim Bednall yesterday (19 December) emailed former KWM partners to provide an update on possible pre-pack administration proceedings.

The email focuses on arrangements around the firm's next tax bill, due at the end of January, with some former partners potentially expected to contribute.

No details of financial obligations are contained within the email, which states that KWM's leadership team will share more information about tax and related terminal loss arrangements when it becomes available.

The email also says partners will be updated about other potential debt liabilities relating to the European business, which is expected to file for pre-pack administration in January. It also offers general information about what happens in the event of a law firm administration.

Hopes of a single firm acquisition of KWM EUME ended when Dentons pulled out of discussions. Numerous firms have been in talks to take on various parts of the business, with the most likely scenario now team-by-team acquisitions out of pre-pack administration.

Both Greenberg Traurig and DLA Piper are set to pick up teams from KWM, with each set to take on six-partner London teams as well as a number of other lawyers.

Other firms that have been interested in buying all or parts of KWM Europe include Winston & Strawn, Mayer Brown and Reed Smith, which is in discussions with a number of partners understood to include competition partner Tom Usher, joint head of life sciences and healthcare Cameron Firth, as well as a number of tax partners including London tax head Gareth Amdor.

KWM declined to comment.