Legal Business

Taking Manhattan: Freshfields hires Skadden Arps specialist in US leveraged finance boost


Freshfields Bruckhaus Deringer has continued its recent push in the US with the hire of experienced Skadden, Arps, Slate, Meagher & Flom counsel David Almroth as a partner to boost its US finance practice.

Almroth is the second finance specialist to join Freshfields from Skadden Arps after former leveraged finance partner James Douglas joined having served the US firm for 25 years up until 2010.

Almroth joined Freshfields’ leveraged finance practice today (7 December) to complement its development of a transactional practice in the US. Since joining Skadden Arps in 1995, Almroth has advised on secured and unsecured financings, asset-based loans, bridge loans, first lien/second lien financings, corporate recapitalisations, and acquisition financings.

Some of his corporate clients have included Hayes Lemmerz International; Builders FirstSource; Duff & Phelps; and Fortress Investment Group; while his private equity clients have included JLL Partners; Access Industries; Marathon Asset Management, Oaktree Capital Management, MTS Health Partners, Veritas Capital and Doughty Hanson.

Douglas, who heads the firm’s US leveraged finance practice, said: ‘Dave is a first class lawyer and we all look forward to working with him. Adding Dave to our team clearly enhances our finance offering to complement our rapidly expanding transactional practice in the US. I have known Dave for many years and both personally and professionally he is a perfect fit for what we are building here in New York.’

Freshfields’ recruitment drive comes as the firm invested in a series of high-profile hires in the last 18 months to establish the firm’s first proper US footprint. In June, Freshfields took on Simpson Thacher & Bartlett’s experienced corporate disputes specialist Linda Martin, which boosted the Magic Circle’s dispute capability in Manhattan.

This came after the firm saw the high-profile arrival of Fried, Frank, Harris, Shriver & Jacobson corporate trio Valerie Ford Jacob, Michael Lewitt and Paul Tropp; and Shearman & Sterling’s M&A veteran Peter Lyons arrival.

The strategic recruitment in US law began after the firm made provisions to allow it to pay a small band of recruits over the top of its lockstep.

For more on Freshfields US play, see The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite (£)

Legal Business

Freshfields closes German IT support as Manchester hub grows to 70


Freshfields Bruckhaus Deringer is stripping back its global support network in favour of its new Manchester back-office centre as it closes its IT support function in Germany.

The news comes as figures finally emerge from the firm around how many staff currently reside at the firm’s new support and legal outpost in Manchester. The new hub, called the Global Centre, houses between 70 and 75 staff members at its temporary Arndale Centre location, and is expected to grow rapidly to 300 employees by mid-2016 – more than a threefold headcount increase over the next seven months.

Legal Business

The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite


Freshfields remains the most potent of the City’s big four but modernising the 270-year-old institution has always been a delicate business. Legal Business meets the leadership team tasked with sealing its place in the global elite.

A City veteran, previously a partner at Freshfields Bruckhaus Deringer, sums up the task ahead for the firm’s incoming leadership. ‘The biggest challenge it faces is how it will retain its leading position in an increasingly competitive market. They are running a few initiatives to tackle this and have been reasonably creative. They are willing to challenge a few taboos but are taking their time. Time they don’t have.’

Legal Business

Freshfields closes German IT support team as Manchester hub set to hit 300 staff in 2016


Freshfields Bruckhaus Deringer is stripping back its worldwide support network in favour of its new Manchester back-office centre as it closes its global IT and helpdesk function in Germany.

The news comes as figures finally emerge from the firm around how many staff currently reside at the firm’s new support and legal outpost in Manchester. The new hub, called the Global Centre, houses between 70 and 75 staff members at its temporary Arndale Centre location, and is expected to grow rapidly to 300 employees by mid-2016 – more than a threefold headcount increase over the next seven months.

Plans are the Global Centre will offer international legal support to its offices worldwide, with the bulk of the German IT function closing, affecting 30 employees.

Stephan Eilers, incoming co-managing partner, said: ‘The firm has closed down parts of IT in Germany and has transferred work to Manchester. It’s not only an efficiency thing but a better way of working together. It’s about allocating things that can be better done in Manchester to Manchester.’

The firm plans to extend this function to other international offices, offering a 24/7 service, starting with Europe and Asia. ‘We are looking very closely at Manchester,’ said Asia managing partner Robert Ashworth. ‘The function is designed to ensure clients and lawyers in Asia get the benefit of services in a different time zone – a 24/7 capability. We are looking to maximise the full capacity in Manchester.’

The hub will accommodate legal services staff, as well as human resources, IT, marketing and business development, office management, document specialists and change management.

The firm will move to a permanent location at One New Bailey in Salford at the beginning of 2017, double the size of its current base after it leased out 80,000 sq ft of office space. Freshfields plans to roll out two more international hubs within the next five years with one in the US and one in Asia.

The launch has been a controversial move for Freshfields, having transferred or made redundant a number of back-office employees at its Fleet Street headquarters. While the redundancy consultation with individuals has closed, the firm has refused to confirm how many were laid off.

The closing down of the IT function in Germany follows the announcement that Freshfields will close either its Cologne or Düsseldorf office in a bid to consolidate its German operation.

For more on management changes and challenges at Freshfields, subscribers can read: ‘The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite.’


Legal Business

Dealwatch: Magic Circle trio and Travers Smith advise as Carlyle sells RAC stake to new investors


Clifford Chance (CC), Linklaters and Freshfields Bruckhaus Deringer have all landed advisory roles alongside Travers Smith on a deal which will see CVC Capital Partners form a partnership with Singapore sovereign wealth fund GIC to invest in the roadside assistance provider RAC through the purchase of Carlyle’s stake in the latter.

The RAC is the second-largest roadside assistance provider across the UK and has approximately 8.6m members as of 30 September, 2015. During Carlyle’s ownership, revenues grew from £417m in 2010 to £498m in 2014.

CC advised longstanding client CVC with a team led by corporate partner David Pearson. The firm also recently advised CVC, which holds $60bn in funds under management, on its $150m acquisition of a 50% stake in Arteria Networks Corporation, a Japan-based telecoms carrier focused on enterprise customers.

Linklaters advised Carlyle on the exit with relationship partner Alex Woodward leading, while Freshfields advised GIC with global financial investors group co-head David Higgins leading a team.

Travers Smith advised RAC management on the transaction with senior partner Chris Hale leading a team alongside corporate partner Adam Orr.

Last year Freshfields, Linklaters and Travers combined for the same clients as Carlyle sold half its majority stake in RAC to GIC.

The transaction is subject to approvals and is expected to close in early 2016.

For more on deal activity subscribers can read: ‘Private equity ABC – the brutally simple world of a private equity lawyer’

Legal Business

‘Greater efficiency’: Freshfields to consolidate Cologne and Düsseldorf offices to create 240-strong team


In a rare move, Freshfields Bruckhaus Deringer will combine its Cologne and Düsseldorf offices to create what it says will be the ‘perfect platform’ for a stronger presence in the Rhineland.

The decision to combine the offices, which are around 45km apart, comes as the firm looks to reconfigure its German operation to create more efficiency.

A spokesperson for the firm said the merger is ‘not driven by cost or a requirement to downsize’, but to create ‘greater efficiency’ and have ‘more lawyers in a single location to offer a stronger and more specialist platform.’ 

Freshfields is currently deciding whether staff will based in Düsseldorf or Cologne, and how much new office space is required. Either way, more space will be needed to accommodate the merger of the two similarly sized offices.

Each office currently has around 20 partners and 120 fee-earners. When combined, the new office will house a 240-strong team with around 40 partners.

Freshfields’ Germany and Austria managing partner Klaus-Stefan Hohenstatt said: ‘We are currently working on medium-term plans to merge our offices in Cologne and Düsseldorf into one office. This will provide us with the perfect platform to create even larger and stronger teams for our clients. The essential aim is to have a stronger presence in the Rhineland.’

The combination is expected to take place next year and will leave the firm with five offices in Germany including Berlin, Frankfurt, Hamburg and Munich, and 600 lawyers in total.

The move comes as White & Case prepares to shut its Munich office after almost ten years since opening, offering its 11-lawyer team the opportunity to relocate to its larger Frankfurt base.

The office closure will affect partners Markus Langen and Tobias Freiherr von Tucher, five local partners and four associates.

Legal Business

Querying the bill: Treasury ‘concerned’ over Freshfields fees on Eurostar sale


Freshfields Bruckhaus Deringer has been put under the spotlight for charging £2.8m in legal fees when advising HM Treasury during the £585.1m sale of the government’s 40% stake in Eurostar International Limited (Eurostar) in March this year.

A report by the National Audit Office said HM Treasury was ‘concerned about the cost of the legal work and considered re-procuring the legal adviser during the sale process but it decided that a change of legal team midway through the process would have been inefficient and problematic due to the time-critical nature of the work.’

The report on the sale also noted that while Freshfields’ fees were discounted, some of the fees were high relative to the cost of the civil service staff who were working on the sale project team.

Freshfields fees were charged on a billed-time basis rather than a fixed fee, and the legal cost for an internal transfer of shares from the Department for Transport (DfT) to the Treasury was £500,000.

The Magic Circle firm was appointed following a procurement process and a team led by corporate partner Stephen Hewes worked on the deal.

The firm refused to comment.

The adviser fees in total and other costs related to the transaction totalled £8.2m, which amounted to 1% of the proceeds of the 40% stake in Eurostar and the preference share. Financial adviser UBS was paid around £3.6m.

The government agreed to sell its share in Eurostar to winning bidder Patina Rail – a consortium made up of a Canadian investment fund, and UK based Hermes Infrastructure.

It’s been a bad week for Freshfields as the report comes after news broke yesterday (5 November) that the UK Takeover Panel had publicly criticised the firm for its role in the Bumi transaction.

Read the full report here.

Legal Business

Freshfields and HFW criticised by Takeover Panel for breaching rules in Bumi transaction


In a rare step, Freshfields Bruckhaus Deringer and Holman Fenwick Willan (HFW) have been publicly criticised by the UK Takeover Panel for breaching its code of conduct when advising on the formation of a multibillion-dollar Indonesian coal group.

London’s takeover regulator launched the investigation in December 2012, and concluded that Freshfields and HFW breached rules when instructing on the formation of the coal group Bumi.

Freshfields had advised takeover company Vallar, while HFW had advised the two Indonesian coal mining companies involved.

The takeover panel found HFW had failed to properly disclose that Bumi’s founding shareholders, the Bakrie Group, and Indonesian shareholder Rosan Roeslani, were acting as concert parties in acquiring stakes totaling more than 30% in Bumi’s predecessor company, given they had close ties to each other when the deal was announced in 2011.

The panel also concluded that Freshfields’ failed to notify the panel prior to the announcement of the Indonesian transactions and said the firm ‘could have done more regarding the concert party issue but makes no finding of breach in relation to section 6(b) of the introduction’.

The panel’s statement said: ‘Freshfields and HFW did not take all reasonable care to ensure that the commercial background to the forward-sale arrangements, and their purpose, was fairly presented to the panel.

‘Freshfields and HFW did not ensure that the direct and causative connection between the collateral requirements under the jumbo loan and the forward-sale arrangements, of which they were each aware, was properly explained to the panel.’

A Freshfields spokesperson said the firm co-operated with the enquiry and has accepted the panel’s conclusions.

‘The panel concludes that Freshfields (and other advisers) failed to provide the Takeover Panel with some information that was relevant in considering the submission, but accepted that there was no intention on the part of any of the advisers to mislead the panel.’

HFW said in a statement: ‘The public statement was issued with the consent of all parties involved and, as such, it is not appropriate for us to make further comment.’ 

The panel has also publicly criticised financial adviser Credit Suisse. It did not impose any fines or other penalties.

Legal Business

Freshfields mourns death of veteran US litigator Tim Coleman


Tim Coleman, a Washington DC-based disputes partner at Freshfields Bruckhaus Deringer, died suddenly yesterday (3 November), after almost six years at the firm.

It is understood that an internal email to partners at the law firm said Coleman fell from a building in the US capital, although Freshfields declined to comment on the circumstances.

Coleman joined the Magic Circle law firm in March 2010 when Freshfields was expanding its US litigation team. He joined after spending four years at the now-defunct Dewey & LeBoeuf where he co-chaired the firm’s white-collar defence and investigations practice group.

Before this, he was a senior counsel to the deputy attorney general at the US Department of Justice for a year, and assistant US attorney at the US attorney’s office in the Southern District of New York from 1997 until 2005. He was also a litigation associate at Wall Street leader Cravath, Swaine & Moore for seven years.

His practice at Freshfields included advising on government investigations, where he regularly represented financial institutions and corporates in investigations of securities and commodities fraud, tax violations, corruption and other violations.

He was particularly experienced in managing complex multijurisdictional matters, having handled cases across Europe, Africa, Asia and the Middle East, and having studied at the European University Institute in Florence and the French National School for the Judiciary in Paris.

Freshfields said in a statement: ‘It is with deep sadness we report that our colleague and friend Tim Coleman passed away in Washington, DC. Tim’s enthusiasm for his family and friends touched everyone around him. His death is a profound loss to all of us personally and to Freshfields. We will do all we can to support his wife and family, who are very much in our thoughts and prayers.’

Legal Business

Moving on: homebuilder McCarthy & Stone turns to A&O for its November listing


Regular counsel Freshfields advises lead arrangers on £1bn IPO

Retirement home builder McCarthy & Stone has selected Allen & Overy (A&O) to advise on its £1bn initial public offering (IPO) as it prepares this month to return to public ownership almost a decade after the developer was taken private.

McCarthy & Stone’s appointment of A&O is a move away from Freshfields Bruckhaus Deringer, which was listed as the developer’s solicitor in its most recent annual report in 2014. However, Freshfields already has a lead role on the float, acting for underwriters Deutsche Bank, Goldman Sachs and Jefferies International, with partner Mark Austin leading the team.