Weil, Gotshal & Manges has paid over £3m to settle a professional negligence claim made against it in late 2013 by private equity house Bancroft.
The case was set to be heard before the commercial court last month but the US firm agreed a confidential settlement that Legal Business understands to be between £3-5m.
Bancroft purchased a 94% stake in Slovakian ice cream company Frost for £6.6m but did not have voting control of the company, which lead to a £10m claim against the firm’s legal advisers Weil, Gotshal & Manges and Slovakian lawyer Jozef Maly.
The private equity group had argued that Weil Gotshal private equity partner Ken Schiff, who is no longer with the firm, failed in his client duty by not adequately translating and explaining foreign law documents, resulting in the firm lacking any voting control.
Maly, rather than his Slovakian law firm, was sued as under Slovak law lawyers are sole practitioners and thus firms have no liability. Bancroft never made a payment to Maly directly for his role in the deal, that cost coming under the fee it paid to Weil, and the claims against him were also resolved in the settlement. The settlement also covered what Legal Business understands are significant legal fees accrued by Bancroft in making the claim.
The size of the settlement is an endorsement of former Linklaters duo, Mark Humphries, who headed up the Magic Circle firm’s advocacy unit, and Kristopher Kerstetter, of boutique litigation firm Humphries Kerstetter. Enlisted by Bancroft, the firm is now handling Tesco’s claim against MasterCard and Visa for overcharges the food retailer alleges is a breach of EU and UK competition law. 4 New Square’s Nicholas Davidson QC had been instructed by the claimants.
Weil instructed Ashurst’s head of dispute resolution Edward Sparrow, who worked alongside Weil’s US-based general counsel Mindy Spector and London partners. Sparrow had instructed Hardwicke’s joint head of chambers Nigel Jones QC. Maly was advised by partner Andrew Quick of Guildford-based boutique Stevens & Bolton.