Spanish Firm Raises €20M With Cash Call to Shore Up Finances
The firm said that the move will help it avoid using bank credit to get through the coronavirus crisis.
By Hannah Roberts / April 14, 2020
Cuatrecasas has boosted its internal financing fund by 25% through partner contributions.
Spanish law firm Cuatrecasas has raised around €20 million ($22 million) through partner contributions to the business, as it looks to shore up its finances during the coronavirus pandemic.
The cash call has bolstered the firm's internal financing fund by 25% to around the €70 million mark, the firm confirmed on Tuesday. The news was first reported by Spanish newspaper La Vanguardia.
The firm made the decision to ask partners to contribute cash shortly after the Spanish lockdown came into effect in mid-March. In doing so, the firm hopes to avoid using nearly €50 million worth of bank credit to support itself.
Cuatrecasas partners, meanwhile, are able to receive interest on their contributions as they are classed as subordinated loans to the business, a spokesperson for the firm confirmed.
Last month, U.K.-headquartered firm Allen & Overy also held a partner cash call in a bid to protect its global operations from the effects of the COVID-19 outbreak.
The firm also said that it would be gradually reducing its partner profit distributions, as well as delaying some bonus payments and recruitment.
A raft of global firms have implemented measures aimed at bolstering their capital, including furloughing staff, halting partner distributions, and cut salaries.