Legal Business

Surprise and strong words as a nine-partner Hogan Lovells team quits for MoFo’s German launch

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While Hogan Lovells has had its integration challenges since the three-year Anglo/American union that created it, the firm’s well-regarded German practice had seemed one part of the empire enjoying prosperous tranquillity.

As such there was some surprise – not least at Hogan Lovells – with the announcement today (24 September), that a nine-partner team is to leave the firm’s Berlin arm to launch a German law practice for top 50 US practice Morrison & Foerster. The team constitutes Hogan Lovells’ entire partnership ranks in Berlin.

Morrison carried out a partner vote to ratify the addition of the team of nine partners, who are currently working with more than 20 associates and counsel. A statement from the firm subsequently confirmed that the US firm had taken on a 30-lawyer team from Hogan Lovells in Berlin.

In what is likely to create tension between the firms, there are still some logistical knots to be resolved. Of the nine partners, it has been suggested that media, M&A and regulatory lawyer Christoph Wagner officially resigned with Hogan Lovells in early September, but it is not clear who else has formally resigned.

However, it has been confirmed that all of the partners listed will be joining Morrison: Karin Arnold (corporate), Dirk Besse (corporate M&A), Eckhard Bremer (competition), Andreas Grünwald (TMT, regulatory, antitrust), Jens-Uwe Hinder (tax, real estate), Thomas Keul (litigation), Jörg Meissner (corporate M&A) and Hanno Timner (employment, data privacy) and Christoph Wagner (M&A, TMT, regulatory and media).

The office managing partners will be Jens-Uwe Hinder and Hanno Timner.

‘We are delighted to become partners of Morrison & Foerster,’ said Wagner. ‘We believe this combination will deliver many benefits to our clients and to MoFo’s well-known TMT clients across its offices in Tokyo, London, New York, Northern California and elsewhere. With MoFo, we build a bridge from Berlin to Silicon Valley to carry our clients at high speed in both directions.’

The departure of Wagner, who was the managing partner of the firm’s Berlin office, and counts BSkyB as a client, will be regarded as a set-back to the 2,527-lawyer Hogan Lovells. Unlike, many of its European offices, the legacy Lovells’ large and profitable German practice has until now largely avoided post-merger losses.

The latest departures still leave Hogan Lovells with 75 partners in Germany across Munich (23), Dusseldorf (21), Frankfurt (16), and Hamburg (15). It is unclear if Hogan Lovells will seek to rebuild in Berlin, which is generally viewed as a secondary legal hub in Germany.

Hogan Lovells co-chief executive David Harris commented in an unusually strongly worded statement: ‘Christoph Wagner’s move earlier this month was planned and agreed. At the time of his departure, the Berlin office partners expressed their strong desire to stay with the firm and we supported that.

‘Despite that support they have now gone back on their commitment and have said that they want to leave. We understand they have accepted offer letters from a competitor, however, they have yet to resign or deal with the usual formalities. Until they do so, we expect them to uphold all their responsibilities as partners in Hogan Lovells. Each of our other offices in Germany is significantly larger than Berlin, which represents less than 10% of total German revenues. Germany overall is performing very well and is a recognised and significant strength of the firm. None of this changes that.’

The addition of Morrison’s Berlin office marks the 1,100-lawyer firm’s second office opening this year, following its launch of an office in Singapore in January.

sarah.downey@legalease.co.uk

Legal Business

Hogan Lovells bolsters mental health and workplace stress measures in the wake of tragic IP partner suicide

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Hogan Lovells has bolstered its policies and procedures around workplace stress and mental health in the wake of the tragic suicide of respected IP partner David Latham earlier this year.

The inquest into Latham’s death, who jumped in front of a tube on 15 February, opened yesterday (12 September) at Westminster Coroner’s Court, when coroner Jean Harkin heard the 58-year-old lawyer was worried about a relatively minor evidence point on a particularly complex case he was working on. Despite constant reassurance from fellow partners and external counsel that his concerns were unjustified, he became ‘inconsolable.’

Latham’s wife Gillian Webb reportedly told the inquest that he had felt ‘unsupported’ at work but after hearing evidence from witnesses, including fellow trademark consultant Nicholas Macfarlane, Harkin concluded: ‘It is clear that he was involved in a matter of work where he felt that he would be criticised and despite reassurances from partners and colleagues at work, he retained those thoughts.’

Since then, the firm, which described Latham after the event as an ‘utterly charming man’ and ‘one of life’s true gentlemen’,  has provided onsite support for those in Latham’s practice area and Hogan Lovells chair Nicholas Cheffings told Legal Business: ‘We have regular interactive talks on health related topic, recent examples include managing your mental health, dealing with stress and developing resilience, sleep, diet and exercise. These events are well attended and appear to be valued by staff and partners alike.’

The firm currently has a dedicated, full-time occupational health adviser who is based on-site and supported by a senior offsite occupational health physician who is available to provide advice and guidance to individuals or line managers who may have concerns. It also has a private GP service and a confidential 24 hour help and advice line staffed by trained counsellors.

Cheffings added: ‘David was a great colleague, highly regarded professional and friend, with whom we all enjoyed working. We were deeply shocked by his death.

‘His death came as a surprise to all of us and even now it feels unimaginable that he is gone. He and his family were good friends of the firm. This was something that we would never have expected of someone who seemed to enjoy life and his work as much as him.’

Cambridge-educated Latham was acknowledged in the Legal 500 for successfully representing Mattel in a cross-border trade mark dispute regarding its Scrabble game brand and recently for his role in co-authoring a European Union (EU) wide study on parasitic copying on behalf of the European Commission.

With a focus on international trade mark and copyright protection, he was also a long-standing legal adviser to Mars and worked for Kraft, British American Tobacco and SABMiller.

He is survived by his wife and three adult children Rebecca, Mark and Liana.

sarah.downey@legalease.co.uk

Legal Business

Deal watch: Hogan Lovells, RPC in key work for Kodak and AstraZeneca as DLA Piper reveals major High Court win

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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.

sarah.downey@legalease.co.uk

Legal Business

Trainee Retention: Hogan Lovells, Travers and RPC reveal numbers

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The trainee retention rates rollercoaster continues to bring with it good news and bad as today firms including Hogan Lovells, Reynolds Porter Chamberlain (RPC) and Travers Smith are on something of a high.

Top 50 UK firm Travers Smith has posted a 95% retention rate while at transatlantic firm Hogan Lovells – where out of a total of 33 trainees, 28 offers were made and 25 were accepted – the firm achieved a retention rate of 76%.

City firm RPC also today unveiled an 80% retention rate after offering 13 out of its 16 trainees a newly-qualified (NQ) position. RPC’s managing partner Jonathan Watmough (pictured) said the results are a ‘testament to the rigour of both our recruitment process and the quality of our trainee programme that we’re consistently able to retain a high percentage of our intake each year.’

Watmough added: ‘Given the massive over-supply of aspiring lawyers in the market simply getting a training contract these days is far harder than it was a decade ago, and the bar for qualification is rising year-on-year. We invest a lot of time and energy into our trainees – having spent time with them, I can say with confidence that this represents a key investment in the future success of our firm.’

These developments follow a more variable picture last week, when Osborne Clarke attained a 100% retention rate but Shoosmiths only 41%.

Osborne Clarke took on all eight of its trainees who qualify next month. This group of trainees is the first to qualify under the Q3D programme, which maintains regular assessment of junior lawyers once they have qualified by testing them in specialist areas. The programme is run in conjunction with BPP Law School.

‘Qualification is a massive milestone in a lawyer’s career, and I would like to congratulate each of these impressive NQs on achieving positions within the firm. At Osborne Clarke we see education and training of our people as a key and ongoing priority – both during their training contracts and also beyond, as seen in our education and development programme Q3D,’ said Nick Johnson, training principle at the firm.

The NQs will be spread across the firm’s offices, with three in London, four in Bristol and one in Reading.

Last week also saw Stephenson Harwood announce it is to retain 80% of its trainees, offering positions to eight out of ten. Three are going into the commercial litigation group, one apiece in finance, corporate, real estate, marine and international strategy, while the eighth trainee is to work in the firm’s Singapore office.

These retention rates are in stark contrast to Shoosmiths, where only nine of its 22 trainees achieved a NQ position, giving it a retention rate of just 41%.

sarah.downey@legalease.co.uk

david.stevenson@legalease.co.uk

Legal Business

Real estate round up: Hogan Lovells, BLP and Nabarro show credentials while Mishcons makes key hire

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Unsurprisingly, what little major real estate work that is around has found its way to the usual trio of law firms – Berwin Leighton Paisner, Hogan Lovells and Nabarro. And while the usual suspects continued to do what they do best, 2012 Legal Business real estate team of the year, Mishcon de Reya, has strengthened its team with a key lateral hire.

Hogan Lovells is representing fellow international firm CMS Cameron McKenna over plans to move its entire London operation to the newly developed Cannon Place site above Cannon Street station, where it has agreed to take a 25-year lease, when it vacates its existing premises at Mitre House in 2015. The scheme is a joint venture between international real estate firm Hines and Network Rail.

The Hogan Lovells team was led by real estate partner Dion Panambalana, alongside infrastructure and project finance partner Gillian Thomas, while Berwin Leighton Paisner’s commercial real estate partner Alan Wight represented the team acting for the landlord.

An enthusiastic Panambalana said: ‘We are delighted to have been selected to act for CMS Cameron McKenna on what is one of the major lettings of 2013. We think the space is great too.’

Elsewhere, Nabarro advised wealth and investment manager Walker Crips on the establishment of its regulated short-term lending fund launched last week.

As the first regulated bridging finance investment fund in the UK, the initiative is designed to generate a target annual income of 8.4% by providing credit to short-term lending companies specialising in residential property, essentially giving a predictable and sustainable income to investors and much needed capital to property developers, said James Allen, manager of the fund at Walker Crips.

Nabarro’s head of alternative investment funds Andrew Wylie said: ‘We have worked hard with Walker Crips to create a unique fund in the regulated market. As well as being regulated by the Financial Conduct Authority, the fund is also a Tax Elected Fund with a structure that satisfies the rules set out by HM Revenue & Customs for this type of product.’

‘Whilst being tailored to bridging finance in this case, we believe the structure we have created could be applied successfully in other lending markets.’

Meanwhile, Mishcon de Reya has hired Olswang’s head of construction Nick Lane as a real estate partner. Lane will join on 2 September and will sit within the firm’s property litigation group as a contentious construction specialist.

His appointment is part of Mishcons growth strategy in disputes, or as Kevin Gold told Legal Business in May, a growth strategy in which it aspires to become ‘one of the leading litigation firm in London.’

Mishcon, with growth rates making it the envy of its peers of late, currently has a three-year strategy for 2013-16 in which has a rather conservative revenue target of £100m by 2016. Its turnover is currently £88.4m.

Speaking of Lane’s appointment, head of real estate Nick Doffman said: ‘Contentious work accounts for more than half of the firm’s business and has become an area of strength for our real estate department.’

‘Our property litigation team has performed beyond expectations during the downturn, and Nick will be instrumental in helping us to grow our existing contentious construction capability.’

Sarah.downey@legalease.co.uk

Legal Business

European movers: Bakers bolsters Madrid office with team of 20 as Hogan Lovells launches in Luxembourg and Wragges takes on Paris team

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In many ways it is a curious time to be building up corporate and finance capability in the depressed Spanish market but Baker & McKenzie has significantly bolstered its strength in its largely third-tier Madrid office with the hire a local team of 20 lawyers from Mayer Brown’s former Spanish ally, Ramón y Cajal, including five partners.

Two of the founding members of the Spanish firm; Alberto Ureba, co-head of Ramón y Cajal’s corporate team, and Francisco Bauzá, co-head of the firm’s finance practice, are leaving to join the global behemoth by the end of the month.

Other key partners expected to leave include Guillermo Guerra, Rafael Bazán and Fernando Marroquín, none of whom were able to comment at the time.

Baker & McKenzie confirmed the news, first reported by a Spanish website, although said it did not release the news as the firm waits until lawyers are in place before announcing hires.

Mayer Brown entered into an exclusive alliance with Ramón y Cajal in 2007, although the US firm confirmed that this alliance is now over.

Elsewhere in Europe, Hogan Lovells looks set to open in the Grand Duchy after partners began voting on the move last Friday, with a Luxembourg office expected to launch at the end of the summer.

The top 15 Global 100 firm is planning on taking advantage of Luxemburg’s attractive tax status and world leading investment funds platform to set up a practice in that space. The office is likely to service a number of other practice areas and clients including corporate, real estate, private equity and tax.

‘We have plans to open in the country later this summer as there are a number of attractions for us in that market,’ said a spokesman for the firm.

This is the latest of a series of international plans to come to fruition. The firm recently bolstered its Latin America presence after obtaining a license to practice in Rio de Janeiro and Sao Paulo last week. It also took three partners from Chadbourne & Parke earlier this year, including one based in Mexico, as the firm announced it was exploring the Mexican market.

In Paris, meanwhile, Wragge & Co has come back from the news last week that a seven-lawyer team had departed for local firm Franklin with the announcement that it has hired a four-lawyer Paris real estate team from the local office of leading UK firm Bird & Bird.

Partner Constance de La Hosseraye, who will lead the Paris-based real estate team, has joined together with three associates.

Wragge & Co’s Paris joint managing partner, Pierre Appremont, said: “Constance and her team are outstanding lawyers and exciting additions to the firm. Highly regarded in the market-place, Constance has a strong track record advising major French and international institutional investors on the full range of real estate matters.’

La Hosseraye added: ‘Wragge & Co has a compelling full-service offering and a market-leading real estate practice. In the three years since opening, the firm has made a big impact in Paris with its single team approach and ability to provide creative, pragmatic solutions to complex transactions. It’s this reputation which attracted me to join.’

 

david.stevenson@legalease.co.uk

Legal Business

Comment: Hogan Lovells was right to get hitched. It needs to remember that

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I’m not a big fan of comparing law firm mergers to marriages. All those torturous metaphors and incongruous imagery. But in assessing the three-year old union between Lovells and Hogan & Hartson, it’s hard to escape the nuptial motif. The deal was forged amid high expectations and a simple analysis: both firms were better off together as neither looked compellingly positioned for an emerging elite of global law. Putting together a transatlantic merger of equals with two large firms that ranked just below the top tier in their respective markets made sense and was arguably a first for the profession.

But, as we address this month, the problem with raising expectations is that you’ve then got to meet them. And on that yardstick the firm has faltered. Three years in Hogan Lovells is still struggling for growth, the gap between its profitability and other global 20 peers remains too wide and the break-through in transactional work is elusive.

Perhaps worse are the thorny cultural issues. The deal was initially sold on the basis of a spookily similar culture between the pair. Charitably, that was stretching it a bit. Uncharitably, Lovells’ management sacrificed trust with a partnership who now feels it didn’t get a straight account of who they were hooking up with. With the conservative Lovells partnership sullenly dealing with an unpopular move to Hogan & Hartson’s merit-driven pay model, it’s clear that Hogan Lovells is well past the honeymoon period.

But even good marriages are hard work. Building something worthwhile takes time, effort and commitment. And what looked like the right move in 2010 looks just as right in 2013.

And if the legacy Lovells management was guilty of mis-selling its US suitor, that wasn’t due to Hogan being less than billed – a problem which really does play havoc with mergers. Hogan was just more culturally distinct than depicted, and in some cases different in a good way. There is also a peculiarly London character to many of the complaints, reflecting the fact that Lovells’ City partnership did historically veer too often towards cosy collegiality over decisive action. Some of the cultural discomfort is welcome, though there have been times when the individualism of Hogan has met the committee-laden governance of Lovells and produced the worst of both worlds. In some areas Hogan Lovells’ management has become frustrated dealing with a frustrating partnership and stopped engaging sufficiently.

The various parties to this union must rediscover why they got together. Quickly. The firm is well positioned in the global market, in some ways better than many of its partners believe. But Hogan Lovells needs to find some fresh momentum and vigour if it is not to waste the opportunity still in its grasp. And that is rather like a marriage.

Alex.novarese@legalease.co.uk

Click here for an in-depth analysis on Hogan Lovells’ post-merger performance

Legal Business

It’s now or… later. Hogan Lovells to make decision on dual chief executive structure

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Hogan Lovells’ senior management has begun discussions over whether to retain the firm’s dual US-UK chief executive (CEO) structure or continue with a single head if UK CEO David Harris steps down as expected next year.

Harris and US counterpart Warren Gorrell have opened the discussion on succession plans with the transatlantic firm’s board, which in turn will canvass the appetite of partners to move to a single leader now the merger of UK firm Lovells and Washington DC’s Hogan & Hartson is three years down the line.

The ten-strong board includes longstanding legacy Lovells City partners Nicholas Cheffings, who also acts as global chair, and finance partner Emily Reid. US members include new appointees Cole Finegan (Denver) and Dan González (Miami), who replaced New York-based Marc Gottridge and Hamburg-based Andreas Meyer respectively in May.

Over the past three years the firm has phased out some dual US-UK senior positions, with London real estate litigator Cheffings becoming sole chair for a three-year term in February 2012, replacing co-chairs Claudette Christian and the retiring John Young.

However, while there appears to be little doubt in the firm that the dual CEO role will eventually be subsumed into one, it remains a highly divisive issue, with more conservative London partners fearful of US dominance under Gorrell’s watch. Tensions have also emerged following the implementation of a new partner pay model for the legacy Lovells.

One City partner said: ‘David has been with Lovells for years, [and] people trust him. Warren has been around for three. There’s a fear if no one was to stand, he would take over on his own. To be fair, there’s enough fear on both sides that people would prefer two chairs than one.’

A European partner disagreed: ‘[Dual management] was one of those things we thought was a bit odd. It was down to the particular personalities of Warren and David.

‘As time goes on, we should move towards a single management structure. Whether that time is now, or in two to three years’ time, it definitely will [happen]. It’s a natural progression. The dual management structure can’t go on forever.’

sarah.downey@legalease.co.uk

Legal Business

Hogan Lovells was right to get hitched. It needs to remember that.

legal-business-default

I’m not a big fan of comparing law firm mergers to marriages. All those torturous metaphors and incongruous imagery. But in assessing the three-year old union between Lovells and Hogan & Hartson, it’s hard to escape the nuptial motif. The deal was forged amid high expectations and a simple analysis: both firms were better off together as neither looked compellingly positioned for an emerging elite of global law. Putting together a transatlantic merger of equals with two large firms that ranked just below the top tier in their respective markets made sense and was arguably a first for the profession.

But, as we address this month, the problem with raising expectations is that you’ve then got to meet them. And on that yardstick the firm has faltered. Three years in Hogan Lovells is still struggling for growth, the gap between its profitability and other global 20 peers remains too wide and the break-through in transactional work is elusive.

Legal Business

It’s now or… later. Hogan Lovells to make decision on dual chief executive structure

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Hogan Lovells’ senior management has begun discussions over whether to retain the firm’s dual US-UK chief executive (CEO) structure or continue with a single head if UK CEO David Harris steps down as expected next year.

Harris (pictured) and US counterpart Warren Gorrell have opened the discussion on succession plans with the transatlantic firm’s board, which in turn will canvass the appetite of partners to move to a single leader now the merger of UK firm Lovells and Washington DC’s Hogan & Hartson is three years down the line.

The ten-strong board includes longstanding legacy Lovells City partners Nicholas Cheffings, who also acts as global chair, and finance partner Emily Reid. US members include new appointees Cole Finegan (Denver) and Dan González (Miami), who replaced New York-based Marc Gottridge and Hamburg-based Andreas Meyer respectively in May.