Legal Business

Updated: Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

Updated: Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

Clifford Chance is among the creditors of the European operations of Lehman Brothers set to receive a windfall after administrator PwC announced a total payout of $7.8bn, the latest in a series of payments made to creditors of the former US investment bank as it nears the end of its mammoth winding-up process.

According to one partner at the Magic Circle firm, the payment could be as much as £10m and a spokesperson for PwC said creditors are likely to receive payment before the end of the calendar year.

Lehman Brothers filed for Chapter 11 bankruptcy in September 2008, listing $639bn of assets against $613bn of outstanding debt but within days creditors filed claims of $1.2trn, double its assets.

PwC reached a settlement with Lehman Brothers International Europe (LBIE)’s former US parent company Lehman Brothers Inc (LBI) in June, paving the way for a return of assets held by the bank. With this latest round of payouts creditors are expected to receive all their money back plus, in some cases, interest.

Meanwhile, the legal fees in the LBIE administration for the six months to 14 September 2013 have reached £295m, with the total US and UK fees and expenses earned by lawyers and other professionals standing at $2bn since Lehman Brothers filed for bankruptcy, an indication of the scale of the task of unwinding the global financial institution’s affairs.

The most recent legal costs relate to advice given, as well as court proceedings and litigation conducted in numerous jurisdictions by a number of legal firms in connection with the LBIE administration.

It was Linklaters, advising alongside Davis Polk & Wardwell, that earlier this year won the settlement resolving all legal and factual issues between LBIE and LBI. Linklaters has advised PwC as administrator on English law matters since 2008. The Magic Circle firm has fielded a large team, including restructuring partners David Ereira, Tony Bugg and Richard Holden in London and litigation partner James Warnot in New York.

Other firms to land roles on the administration include Weil, Gotshal & Manges, New York-based Hughes Hubbard & Reed and legacy Norton Rose.

Clifford Chance declined to comment.

It is expected a number of other Lehman advisers will gain windfalls for written-off fees.

Update: Over 30 other law firms have been named as creditors set to receive a windfall of the European operations of Lehman Brothers in a list published by PwC on 5 December.

The firms owed money by Lehman Brothers International Europe (LBIE) are confirmed as trade creditors in a 300-strong list. In addition to Clifford Chance, fellow Magic Circle firms Allen & Overy, Linklaters, Slaughter and May, and Freshfields Bruckhaus Deringer are due to be reimbursed.

Other firms listed includes Dublin-based firms A&L Goodbody, McCann FitzGerald and Dillon Eustace; and US firms McDermott Will & Emery, Skadden, Arps Slate, Meagher & Flom, and Weil, Gotshal & Manges. The now-defunct Dewey & LeBoeuf is also named as a recipient.

sarah.downey@legalease.co.uk

Legal Business

Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

As latest payout confirmed to Lehman’s creditors, total US and UK costs soar to $2bn

Clifford Chance is among the creditors of the European operations of Lehman Brothers set to receive a windfall after administrator PwC announced a total payout of $7.8bn, the latest in a series of payments made to creditors of the former US investment bank as it nears the end of its mammoth winding-up process.

According to one partner at the Magic Circle firm, the payment could be as much as £10m and a spokesperson for PwC said creditors are likely to receive payment before the end of the calendar year.

Lehman Brothers filed for Chapter 11 bankruptcy in September 2008, listing $639bn of assets against $613bn of outstanding debt but within days creditors filed claims of $1.2trn, double its assets.

Legal Business

PwC boosts energy capability with hire of NRF head of nuclear Fiona Reilly

PwC boosts energy capability with hire of NRF head of nuclear Fiona Reilly

PricewaterhouseCoopers (PwC) has boosted its nuclear energy capability with the hire of longstanding Norton Rose Fulbright energy partner and head of nuclear services Fiona Reilly, the third departure from the top 10 LB100 firm’s London office this month.

Reilly joined the now 2647-lawyer firm in January 1999, having previously worked in-house as commercial counsel at UK nuclear steam turbine producer Alstom.

During her time at Norton Rose Reilly, who became a partner in 2011, was seconded to Star Energy as its general counsel, advising on corporate and commercial issues.She specialises in all aspects of the nuclear cycle from new build and licensing, decommissioning, fuel storage and waste management, and frequently advises on liability regimes and contracts relating to the financing and construction of nuclear stations.

Reilly joins PwC as a director in the nuclear energy team to develop the global energy practice, where she will be involved in transactions, dispute resolution and regulatory compliance.

Her departure comes six months after the merger between Norton Rose and Houston-based Fulbright & Jaworski went live in June, and marks the third exit this month after longstanding antitrust partner Mark Jones most recently announced he is to join the antitrust, competition and economic regulation practice at fellow transatlantic firm Hogan Lovells in the New Year, as announced by the firm on Tuesday (19 November).

Jones’ resignation only shortly follows that of leading competition partner Michael Grenfell, who confirmed to Legal Business last Thursday (14 November) that he is to join the Competition and Markets Authority (CMA) as a senior sectoral director, having specialised in competition for 25 years and headed NRF’s competition group between 2002-2011.

A spokesperson for Norton Rose Fulbright said: ‘We confirm that Fiona has left the practice. We thank her for her contribution and wish her all the best in her new role.’

PwC was unavailable for comment immediately at the time of writing.

sarah.downey@legalease.co.uk

Legal Business

It’s a wrap – Penningtons acquires Manches after PWC brokers sale of business and assets

It’s a wrap – Penningtons acquires Manches after PWC brokers sale of business and assets

In what was initially billed as merger talks but has turned out to be far more of a takeover Penningtons yesterday acquired the trading operations of Manches in a deal brokered by PriceWaterhouseCoopers as administrators.

Under the business transfer agreement, 265 Manches employees, including 46 partners will now move to Penningtons. However, in a reflection of the fact that, despite their contrasting recent profitability the firms are close in lawyer size and revenues, the combined firm will be called Penningtons Manches.

Having been this year earmarked as a firm in need of a merger, Manches turned out one of the worst performances of this year’s LB100, despite operating in the burgeoning private client sector, with revenues down 13% to £26.3m. The decline shifted the firm down 11 places to 93 – its lowest ever rank in the table.

The firm’s profit per lawyer (PPL) was this year at a low of £15,000, amounting to a 67% drop from the first LB100 in 1993, when the firm’s PPL was £44,900. Profit per equity partner (PEP) at the 139-lawyer firm also dropped to £134,000 during the last financial year, compared to £235,000 in 2011/12, a drop of 43%.

In contrast, Penningtons’ revenues increased by a marginal 1% this financial year to £32.5m – a 14% increase over five years – and its PPL is almost three times Manches at £42,000 with PEP more than double Manches at £275,000. However, those profit figures have dropped considerably over the past year, with PEP down by 9%.

The newly-merged firm should now rank ahead of private client firm Speechly Bircham, which generated £57.5m revenue this year coming in 52nd place, and enter the third quartile of the LB100.

Chief executive David Raine, who will continue to head Penningtons Manches, said: ‘This agreement fits with our strategic aims and responds to the ever-changing legal environment in which we now operate.

‘The synergy between Penningtons and Manches was evident early on in our discussions and by joining forces we will be able to offer an enhanced level of expertise to all our clients. The strong reputation and combined experience of our people will enable us to maximise our potential in our core practice areas and in the key sectors in which we operate.

‘The acquisition is the culmination of sustained growth for Penningtons over the last five years.’

Penningtons merged with City practices Dawsons and Wedlake Saint and opened offices in Cambridge and Guildford in spring last year.

sarah.downey@legalease.co.uk

Legal Business

In-house: Clifford Chance and Slaughter and May lawyers take senior roles at CMA, Shell and PwC

In-house: Clifford Chance and Slaughter and May lawyers take senior roles at CMA, Shell and PwC

Magic circle lawyers have this week filled a number of senior regulatory and in-house positions, with a Slaughter and May partner unveiled as general counsel of the new Competition and Markets Authority (CMA) and a former lawyer named Shell‘s UK legal head; while Clifford Chance‘s head of employee benefits has joined PwC as a director in its employee rewards team.

The CMA – the new body which brings together the Competition Commission and and some consumer functions of the Office of Fair Trading- yesterday (12 September) announced the appointment of former Slaughter and May partner Sarah Cardell as GC as it completes its leadership team in time for its official launch on 1 October.Cardell most recently occupied the role of partner for legal markets at energy watchdog Ofgem, having left her position as competition partner at Slaughters in March 2011. She will join new CMA executive director, Sonya Branch, who moves across from her role as the executive director at the OFT, where she has been since 2007 having left role as corporate partner at Clifford Chance.

Business secretary Vince Cable said of the appointments: ‘The appointment of this executive team is another milestone in the creation of the new CMA. [They] complete our senior executive team and are a major step in creating the new organisation.’

Shell meanwhile, has appointed another former Slaughters lawyer as its UK legal chief, as Michael Coates takes over from current head Bob Henderson. Henderson is relocating to the US next month to take up the post of associate GC of integrated gas and new business development as part of a reorganisation of the energy giant’s senior legal team.

Coates, who will assume the new role on 1 October, most recently worked as secretary to the company’s executive committee and as executive assistant to Shell chief executive Peter Voser, a role he took in 2011, having joined Shell from Slaughters in 2004.

The restructuring was led by group legal director Peter Rees QC in a bid to expose senior lawyers to different areas within the business.

The news comes shortly after Shell concluded a review of its external legal advisers in May, ‘prequalifying’ more than 150 firms to its global network, a number which will then reduce as Shell’s lawyers form closer relationships with certain firms.

Elsewhere, PwC continues to expand its 140-strong reward team with the appointment of Clifford Chance’s former head of employee benefits Daniel Hepburn. Hepburn has advised on employee rewards for over 20 years and has worked with many leading UK and multinational companies on their employee incentive arrangements. In his new role, he will advise on the design and implementation of a wide range of employee and executive incentives, including share, cash, bonus and other arrangements.

Carol Dempsey, a partner in PwC’s reward team, said: ‘Daniel joins at a crucial time as many companies are re-evaluating the way they reward their employees of all levels, while dealing with ever increasing regulation on remuneration structures and practices.’

francesca.fanshawe@legalease.co.uk