Legal Business

Ashurst and Hogan Lovells win roles on Palmer & Harvey administration as takeover plan goes up in smoke

Ashurst and Hogan Lovells win roles on Palmer & Harvey administration as takeover plan goes up in smoke

City firms have landed lead mandates on the administration of beleaguered British tobacco wholesaler Palmer & Harvey (P&H) following the collapse of a rescue takeover by The Carlyle Group.

Ashurst and Hogan Lovells are advising administrator PwC, which was brought in when a sale process that would see US buyout giant Carlyle acquire the ailing business fell over.

Carlyle had signed a heads of terms and memorandum of understanding to acquire P&H – which counts UK supermarket chain Tesco as one of its biggest clients – following a competitive sale process in the summer. The deal was not done by the time the private equity firm’s exclusivity ran out at the end of November, with the company’s liquidity crisis giving it no other option than to call in the administrator.

The Ashurst team is led by Giles Boothman, global head of restructuring and special situations, and also includes banking partner Jane Fissenden. Restructuring partner Deborah Gregor is leading the Hogan Lovells team, which is acting for both PwC and P&H’s lending banks.

Allen & Overy is advising Imperial Tobacco as one of the largest trade creditors to P&H. Slaughter and May is acting for the other major trade creditor, Japan Tobacco International (JTI). P&H had tried to address its liquidity issues in April when trade debt owed to Imperial and JTI was converted into senior secured long-tenor debt.

The company was also hit by Tesco’s proposed £3.7bn takeover of rival tobacco supplier Booker, which shrouded the future of P&H’s relationship with its biggest customer in doubt. That deal was given the provisional go-ahead in mid-November by the Competition and Markets Authority (CMA).

‘P&H had been facing a number of systematic issues in which the company was caught between powerful tobacco manufacturers and retail giants, a position which was not sustainable in the face of severely squeezed margins’, one industry source said.

PwC’s Matthew Callaghan, Ian Green and Zelf Hussein are the joint administrators. Callaghan, joint administrator and partner at PwC, said: ‘The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while. The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale. Therefore, the directors have had no choice but to appoint administrators’.

The P&H Group employed around 3,400 employees, of which roughly 2,500 have immediately been made redundant.

nathalie.tidman@legalease.co.uk

Legal Business

Quest to guard privilege begins as ENRC wins right to appeal SFO order

Quest to guard privilege begins as ENRC wins right to appeal SFO order

Throwing a lifeline to the increasingly eroded principle of legal professional privilege (LPP), Eurasian Natural Resources Corporation (ENRC) has this week been granted the right to appeal against a controversial order to disclose documents in a Serious Fraud Office (SFO) investigation. Hogan Lovells is the latest in a series of firms to be instructed by ENRC over the SFO investigation.

In May, the High Court had ruled that documents prepared by the mining giant ENRC relating to an SFO probe into alleged fraud, bribery and corruption were not covered by LPP and therefore had to be disclosed.

Justice Andrews held that there was ‘a recognised public interest in the SFO being able to go about its business of investigating and prosecuting crime; and the sort of evidence which one would expect to be found in the disputed documents is likely to be of considerable value to its current investigation.’

On a wider point, she noted ‘legal privilege attaches only to communications between the lawyer and those individuals who are authorised to obtain legal advice on that entity’s behalf. Communications between the solicitors and employees or officers of the client, however senior in the corporate hierarchy, who do not fall within that description will not be subject to legal advice privilege.’

At the time, ENRC confirmed it would appeal the decision, because ‘the effect of this judgment is that a party who wishes to consult a lawyer in relation to an SFO dawn raid or criminal investigation is not entitled to the protections afforded by litigation privilege.’

Herbert Smith Freehills disputes partner James Norris-Jones told Legal Business that it is a difficult situation for clients at the moment due to the SFO and Financial Conduct Authority (FCA) taking ‘increasingly aggressive approaches in an incredibly regulated world’.

He added: ‘It’s becoming increasingly difficult to preserve LPP. I don’t think it’s good for this country to be out of step on an issue like privilege’.

Simmons & Simmons senior partner Colin Passmore described the appeal being granted as ‘good news’, but also called for the matter to be concluded quickly.

‘If you talk to lawyers who advise corporates, they find the whole issue very difficult. How can you gather information when employees of a company are not regarded as part of the client?’

Signature Litigation had been representing ENRC throughout the investigation, led by founder Graham Huntley, who had instructed Fountain Court Chambers’ Richard Lissack QC and Tamara Oppenheimer, in addition to Outer Temple Chambers’ Saaman Pourghadiri.

However, Hogan Lovells has today  (12 October) taken over the mandate, with commercial litigation partners Chris Hardman and Michael Roberts advising ENRC on its appeal.

ENRC had initially hired Dechert to represent it and undertake a self-reporting process in 2011, but dropped the firm in 2014 after the company claimed it had been overcharged by over £11m.

tom.baker@legalease.co.uk

Legal Business

Looking east: Linklaters cements Saudi partnership as Hogan Lovells shuts Mongolia base

Looking east: Linklaters cements Saudi partnership as Hogan Lovells shuts Mongolia base

Two Global 100 firms have made opposing international moves this week, with Linklaters signing a partnership with a local firm in Saudi Arabia while Hogan Lovells announced the closure of its Mongolia base.

Linklaters announced today (11 October) it has entered a formal agreement with 20-lawyer Zamakhchary & Co (Z & Co), meaning two lawyers from the Magic Circle firm will be based in the kingdom.

The announcement comes five years after the two firms started exchanging referrals and working together on cross-border transactions, capital markets, finance and project finance. Four-partner Z & Co has offices in Riyadh and Jeddah.

Linklaters senior associate Omar El Sayed, described by Middle East managing partner Scott Campbell as ‘one of our young superstars’, will relocate from Dubai to work from Z & Co’s offices and lead Linklater’s Saudi operation. A lateral hire, still to be announced, will join El Sayed later this year.

Linklaters currently has 40 lawyers in Dubai and Abu Dhabi, managing the firm’s operations in the Middle East and North Africa region.

Campbell told Legal Business today’s agreement means the Magic Circle firm is ‘formally committing to having people on the ground in the Kingdom in the long term’ with the aim to ‘build a bigger business’.

He connected the expansion of the firm’s operation in the region to the Vision 2030 programme, through which the Kingdom is looking to diversify Saudi economy away from oil through economic and social initiatives and reforms, in the hope of generating $100bn in non-oil revenue by 2020 and develop six million jobs in non-oil sectors by 2030.

‘The modernisation and transformation of an economy brings a lot of advice opportunities in the transactional and corporate finance space,’ added Campbell.

A number of global firms have expanded their presence in the Kingdom since the programme was launched last year.

Last month CMS established a partnership with Riyadh practice Feras Al Shawaf . Clifford Chance announced in August last year that it was entering an association with Abuhimed Alsheikh Alhagbani Law Firm (AS&H), reworking its operation in the region after contention with local authorities over the legality of its Saudi office.

Herbert Smith Freehills  and DLA Piper also have a presence in the Kingdom.

Meanwhile, Hogan Lovells announced it will close its Mongolia office at the end of November after seven years, with local managing partner Chris Melville set to establish a new independent firm in Ulaanbaatar that will co-operate with Hogan Lovells.

Global chief executive Steve Immelt said the decision followed ‘a review of the market and our investment priorities’, adding that Melville had been ‘closely involved in the decision’. The firm has not said how many of the other 14 people employed in Ulaanbaatar will move to the new office.

The announcement means DLA Piper and Dentons are among the very few international firms with a presence in Mongolia.

marco.cillario@legalbusiness.co.uk

Legal Business

Revolving Doors: Hogan Lovells and OC bolster City ranks while Kennedys ramps up US practice with three-partner hire

Revolving Doors: Hogan Lovells and OC bolster City ranks while Kennedys ramps up US practice with three-partner hire

It has been another busy seven days for senior recruitment, with a host of top 50 UK law firms making senior appointments in the Square Mile and beyond.

In London, Hogan Lovells has bolstered its finance practice with the recruitment of Norton Rose Fulbright (NRF) partner Arun Velusami, who leaves the City firm after 11 years, seven of them as a partner. Velusami joins Hogan Lovells’ Africa practice in London and will also be a member of the Anglo-American firm’s energy, infrastructure and projects team. Adrian Walker, global co-head of Hogan Lovells’ energy and projects team, described Velusami as a ‘class act’.

Still in the City, Osborne Clarke (OC) has added to its buyout team, recruiting Squire Patton Boggs’ UK private equity head Tim Hewens. The appointment brings to 11 the number of partners covering private equity at OC.

Eversheds Sutherland, meanwhile, has recruited Jake McQuitty from TLT to strengthen its financial services disputes and investigations team. Before joining TLT in 2015, he was head of EMEA investigations and enforcement at Barclays.

On the international stage, Kennedys, Herbert Smith Freehills (HSF) and Dentons have all announced significant hires.

Kennedys returned to the US to bolster its expanding practice, recruiting from Sedgwick for the second time in a month, taking on the American firm’s Chicago managing partner and two other partners.

The UK-based insurance specialist has recruited Sedgwick partners Eric Scheiner, Dick Geddes and Jennifer Quinn Broda. The team has worked on matters including the Three Mile Island accident, the Exxon Valdez oil spill and explosions at the Piper Alpha oil rig and Buncefield in the UK.

The moves comes after Kennedys in June secured a merger with US practice Carroll McNulty & Kull. Kennedys senior partner Nick Thomas told Legal Business: ‘Since we announced the merger, we have had a lot of calls from a lot of people that say: “The idea of a law firm in the insurance sector with a big US presence and a global footprint looks very interesting, can we join?” It is an attractive platform for many.’

In continental Europe, HSF has hired arbitration partner Thierry Tomasi in Paris from disputes boutique Betto Seraglini. Tomasi specialises in aviation, energy, defence and construction and said he would look to develop his practice into Latin America.

In the Netherlands, Dentons Boekel has recruited a finance team from global rival Baker McKenzie. Former head of Bakers’ Dutch lending team Marcel Janssen will become Dentons’ head of banking and finance in Amsterdam, joining with three associates. The hires comes after Dentons’ merger in April with national practice Boekel.

marco.cillario@legalbusiness.co.uk

Legal Business

‘Unprecedented in scale’: City bluebloods advise as Tata separates UK pension scheme

‘Unprecedented in scale’: City bluebloods advise as Tata separates UK pension scheme

Travers Smith, Slaughter and May and Hogan Lovells all advised as Tata Steel last month signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.

As a result of the separation, achieved through a regulated apportionment arrangement, Tata will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of The Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.

Legal Business

Hogan Lovells to handle appeal as TfL refuses Uber new licence

Hogan Lovells to handle appeal as TfL refuses Uber new licence

Hogan Lovells has been drafted in to advise Uber as the US-based ridesharing company launches a legal challenge to Transport for London’s (TfL) decision to not renew its private hire licence.

TfL today (22 September) issued a statement confirming that Uber will not be given another private hire operator licence after the current one expires on 30 September.

TfL stated that Uber’s approach to reporting serious criminal offences and how medical certificates are obtained were among the reasons it came to the decision.

‘Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications’, the statement read.

Uber has 21 days to appeal the decision but can continue to operate until that timeframe expires.

Hogan Lovells regulatory partner Charles Brasted is advising Uber, and has instructed Tom de la Mare QC of Blackstone Chambers.

The firm has previous history advising the company, as it acted for Uber last August on its legal challenge against new guidelines proposed by TfL. The regulations included written English tests for drivers and insurance for drivers for the entire time that their vehicle is licensed. In that matter, TfL was represented by its in-house team and instructed Martin Chamberlain QC of Brick Court Chambers.

Paul Dacam, who has since retired from the firm, led for Hogan Lovells and instructed de la Mare QC alongside Hanif Mussa of Blackstone Chambers.

Uber’s European arm has faced an eventful year so far, as the company’s European, Middle East and Africa (EMEA) general counsel (GC) stepped down in June. An Uber spokesperson confirmed that Amsterdam-based Jim Callaghan had resigned as a result of ‘family reasons’.

tom.baker@legalease.co.uk

Legal Business

Hogan Lovells to shed 90 City jobs as law firms continue to transfer back-office roles to low-cost hubs

Hogan Lovells to shed 90 City jobs as law firms continue to transfer back-office roles to low-cost hubs

Pity the poor business support staff. A week after Pinsent Masons confirmed that it was consulting on cutting 100 non-legal jobs, Hogan Lovells has announced that around 90 roles in its London arm are likely to go as part of a restructuring of its business.

About 78 business service roles and 12 legal support roles will be phased out or transferred to the firm’s West Midlands legal service centre or South African global business services hub.

The Anglo-American law firm today (18 September) launched a consultation with those in London who are affected. A spokesperson for Hogan Lovells told Legal Business: ‘Subject to final consultation, we expect the vast majority of the roles will be moving and we expect two thirds of those roles will be to Johannesburg.’

Opened in March 2014, Hogan Lovells’ Birmingham hub currently employs around 70 staff on volume legal work, such as due diligence and document reviews for litigation, corporate and real estate projects, as well as document production.

Around 110 people work at the Johannesburg centre, which launched in February 2014. The office covers areas including conflict-checking, finance, marketing and business development and technology.

Hogan Lovells deputy chief executive David Hudd said the move was part of the firm’s strategy to evolve ‘so [the firm] continues to meet our business needs as well as those of our clients in a rapidly changing and highly competitive market’. He added: ‘We are fully committed to ensuring that our people are treated fairly and are fully supported throughout this process.’

UK and Africa regional managing partner Susan Bright added: ‘This is the logical next step to take in the development of our practice in the UK. In Johannesburg we have built a very well-integrated team which partners with our other global business services centre in Louisville, Kentucky. Since opening our Birmingham office we have built a consistently profitable and strong qualified lawyer and paralegal capability.’

Such moves underline the continuing hard-edged quest for efficiency at major law firms, with a host of major UK practices, including Allen & Overy, Freshfields Bruckhaus Deringer, Baker McKenzie and Ashurst, continuing to shift back-office roles out of London to lower-cost hubs in the UK and abroad.

Such moves, which typically impact far more heavily on non-legal support staff, come even amid respectable financial performance, with Hogan Lovells earlier this year announcing that its revenues for 2016 were up 6% to $1.93bn.

marco.cillario@legalease.co.uk

Click here  for an extended analysis on the state of Hogan Lovells as the firm fights to secure its position in a highly competitive cross-border market (£)

Legal Business

Never waste a crisis as Ashurst and Hogan Lovells step in amid Bell Pottinger’s administration woes

Never waste a crisis as Ashurst and Hogan Lovells step in amid Bell Pottinger’s administration woes

As scandal-ridden PR agency Bell Pottinger collapses into administration, Ashurst, Hogan Lovells and Mishcon de Reya have swept in to take advisory roles during the aftermath.

Ashurst is acting for Bell Pottinger’s administrators, BDO, with a team consisting of corporate partner Bruce Hanton and restructuring partner Olga Galazoula. Ashurst had previously represented Bell Pottinger in 2012 when founder Lord Bell acquired the PR company back from its parent company Chime. Hogan Lovells is advising the agency’s biggest lender, Lloyds Banking Group.

The administration of the high-profile agency is directly linked to a widely criticised campaign in South Africa. The agency rapidly collapsed after the publication on 4 September of a report by Herbert Smith Freehills (HSF), the day after Bell Pottinger chief executive James Henderson resigned. The report criticised the agency for creating potentially racially divisive material targeted towards ‘wealthy white South African individuals or corporates’.

Since the report was published, both Pinsent Masons and Berwin Leighton Paisner have announced that they were discontinuing their relationship with Bell Pottinger, which had a number of law firm clients. The company, which rapidly became one of the City’s dominant communication firms after its launch in the buccaneering 1980s, has around 100 staff in the UK.

Meanwhile, Mishcon has been primed to advise two former Bell Pottinger partners who are weighing up their options to sue their former employer, according to press reports, though the firm refused to confirm its role.

The notice of intention for Bell Pottinger to appoint administrators was filed on 8 September, but came into effect on 12 September. None of the company’s subsidiaries outside the UK are in administration, and they will continue to trade under the control of separate management teams.

A spokesperson for BDO said: ‘Following an immediate assessment of the financial position, the administrators have made a number of redundancies. The administrators are now working with the remaining partners and employees to seek an orderly transfer of Bell Pottinger’s clients to other firms in order to protect and realise value for creditors.’

tom.baker@legalease.co.uk

Legal Business

‘Unprecedented in scale’: Travers, Slaughters and Hogan Lovells advise as Tata Steel separates UK pension scheme

‘Unprecedented in scale’: Travers, Slaughters and Hogan Lovells advise as Tata Steel separates UK pension scheme

Travers Smith, Slaughter and May and Hogan Lovells have all advised as Tata Steel today signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.

As a result of the separation, achieved through a regulated apportionment arrangement (RAA), Tata Steel will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of the Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.

Slaughter and May advised long-standing client Tata Steel on the restructuring, with pensions and employment partners Charles Cameron and Phil Linnard, restructuring partner Ian Johnson, finance partner Andrew McClean and M&A partner Padraig Cronin comprising the team. PwC also represented Tata Steel.

The BSPS trustee has been a Travers Smith client for ten years, and the firm represented it on the restructuring with a team that included pensions partners Paul Stannard, Dan Naylor and Susie Daykin, finance partners Jeremy Walsh and Ed Smith, corporate partner Adrian West, tax partner Richard Stratton and derivatives partner Jonathan Gilmour.

The separation of the BSPS had been seen as a barrier to a potential merger of Tata Steel with Germany’s ThyssenKrupp, but the separation may now accelerate merger discussions.

In a statement, Tata Steel’s group executive director Koushik Chatterjee said: ‘Considering the continued challenges in the global steel industry as well as the uncertain global politico-economic environment, the RAA presents the best possible structural outcome for the members of the British Steel Pension Scheme and for the Tata Steel UK business.’

The PPF, which was represented by Hogan Lovells, said in a statement: ‘Members of the British Steel Pension Scheme will have seen a lot of speculation about the future of their pensions, so we want to reassure them the PPF is there to protect them throughout this process.’

Slaughter’s Cameron added: ‘This restructuring is unusual in a number of ways, and unprecedented in its scale. It is by far the largest pension scheme restructuring carried out in the UK.’

In April 2016, Forsters lined up opposite Slaughter and May on Tata Steel’s deal to sell its European long-products business to UK investment house Greybull Capital.

tom.baker@legalease.co.uk

Legal Business

‘Takes us to a new level’: Hogan Lovells picks up Freshfields investment funds veteran Baird in latest partner exit

‘Takes us to a new level’: Hogan Lovells picks up Freshfields investment funds veteran Baird in latest partner exit

Freshfields Bruckhaus Deringer has seen the departure of a member of its corporate team with the exit of investment funds partner Jonathan Baird to Hogan Lovells.

He is the latest hire into Hogan Lovells’ investment funds practice, with the transatlantic firm bringing in New York-based Adam Tope from Greenberg Traurig in March.

Baird joined Freshfields as an associate in 1994 before moving on to Chicago-based Altheimer & Gray in 1999 where he was made partner. He returned to Freshfields in 2003, the same year Altheimer collapsed. Baird has advised clients including 3i, BH Global, Riverstone Energy and Grainger.

Hogan Lovells’ investment funds co-head Nick Holman said the group has already had ‘a tremendously strong year’. He added that bringing in ‘someone of Jonathan’s calibre and reputation to our team takes us to a new level’.

Baird said he had worked opposite Hogan Lovells on ‘some significant transactions in the past’ and noted his new firm’s ‘excellence in the funds space’.

In the last 12 months, Freshfields has seen the exit of finance partners Jonathan Birks and Sean Lacey to Kirkland & Ellis, with corporate partner Ben Spiers departing the firm for Simpson Thacher & Bartlett. In April, finance partner Dougall Molson joined Fieldfisher and, earlier this week, it emerged banking partner Geoff O’Dea had made the move to Baker McKenzie.

Last week, Freshfields announced the firm’s joint managing partner Chris Pugh is to step down less than half way into his term. He is the second member of its c-suite to step down since the four member team took up the role in January last year. Executive partner Michael Lacovara left the firm for Latham & Watkins in June 2016.

madeleine.farman@leaglease.co.uk