This week has seen two of the larger global challenger firms reveal significant wins on behalf of major international clients. Hogan Lovells closed a $650m acquisition for the trustees of the Kodak Pension Plan and DLA Piper secured victory for China Southern Airlines in the High Court. Meanwhile, one of the top performers in this year’s LB100, RPC, is advising AstraZeneca on its move to a new purpose-built HQ in Cambridge.
Hogan Lovells is a longstanding advisor to the trustees of the Kodak Pension Plan (KPP) – Kodak’s largest creditor. Led by pensions partner Katie Banks, the firm worked on a comprehensive settlement of KPP’s claims against Eastman Kodak Company (EKC) and Kodak Limited, its UK subsidiary. This included the acquisition of EKC’s personalised imaging (PI) and document imaging (DI) businesses, valued at US$650m but acquired through a mixture of release of claims and a cash consideration of $325m. The acquisition closed Tuesday (3 September) the day of EKC’s emergence from bankruptcy.
EKC, the guarantor of Kodak Limited’s obligations to KPP, filed for Chapter 11 bankruptcy protection in the US in January 2012 which consequently led to the trustees of KPP filing unsecured claims for $2.8bn against EKC last year.
After extensive negotiations, EKC and KPP agreed a settlement, approved by the US bankruptcy court earlier this year, including the acquisition by the KPP of the PI and DI businesses in an elaborate carve-out transaction which involved extracting the relevant assets from over 50 EKC entities worldwide. The ongoing income generated by these businesses will be used to fund member benefits.
Linklaters, led by London-based pensions partner Mark Blyth and a Sullivan & Cromwell team advised Kodak Limited and Eastman Kodak respectively.
Banks, who has advised the KPP trustees since 1994 and has also advised ITV, Vodafone, and Santander in the past, describes the deal as the ‘biggest pension restructuring’ on record.
‘I’m the pension’s lawyer who has had the relationship with the trustees but I had to get help from employment, competition, and IP lawyers around the world,’ she adds.
Banks’ team included New York-based insolvency and restructuring partner Christopher Donoho, commercial partner Elizabeth Donley, and tax partner Karen Hughes.
Meanwhile DLA Piper has announced a significant victory for its client this week after representing China Southern Airlines (CSA) in the High Court earlier this summer. In a judgment handed down at the end of July, CSA was awarded $28m in damages and interest over a breach of contract dispute brought by commodity trader Tigris International.
Tigris made the claim against CSA for $46m in damages in a battle which arose over an aircraft sale agreement between the parties for the purchase of six redundant Airbus A300 aircraft and five spare Pratt & Whitney engines for $124m.
Due to an internal shareholder dispute at Tigris, CSA was only able to deliver one of the six aircraft to Tigris. To mitigate its loss, CSA subsequently sold the remaining five aircraft to other purchasers, including a South African company owned by the financier of Tigris.
CSA counterclaimed for its losses of about $37m arising from Tigris’ failure to pay for and take delivery of the undelivered aircrafts and engines as well as other associated expenses such as parking and maintenance charges.
Fountain Court’s Bankim Thanki QC and David Murray were instructed by DLA’s Hong Kong-based partner Kevin Chan and City-based partner Mark Franklin, while Blackstone Chambers’ Hugo Page QC was instructed by Watling & Co on behalf of Tigris. Heard by Justice Simon, the 10-day trial in London’s Commercial Court ultimately ended in dismissal of the claims against CSA. In addition to the $28m in damages awarded to CSA on its counterclaim, the court ruled that CSA was entitled to forfeit the deposit paid by the claimant in the amount of $10.5m.
Chan said: ‘This case is a significant victory for CSA and we are pleased with the result we achieved for our client. The case involved close collaboration of our colleagues from various countries around the world, including Hong Kong, China, the UK, the Netherlands, the US, as well as DLA Cliffe Dekker Hofmeyr in South Africa.’
Finally, RPC has won the mandate to be sole advisor on a project involving pharma giant AstraZeneca on the acquisition, construction and planning related issues for a new global research and development (R&D) centre and corporate headquarters at the Cambridge Biomedical Campus, which AstraZeneca intends to invest £330m into.
The deal was headed by real estate head Martin Barrett and construction partner Stephen Malley and the team was initially called to advise on the establishment of the new R&D centre in March this year. RPC is a longstanding advisor to AstraZeneca, having previously advised on property and construction issues when the company moved to an office space at 2 Kingdom Street at Paddington Central, as well as a joint venture deal with Bericote Properties for a distribution park at Severnside.
Barrett noted the deal was ‘one of the largest’ in the market at present. ‘This new facility will have state-of-the-art technology and AstraZeneca’s move is further recognition that Cambridge is becoming a pre-eminent location for the life sciences industry,’ he added.