Legal Business

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

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

LB 100 – The second quartile: Wind swept

LB 100 – The second quartile: Wind swept

Mid-pack advisers faced contrasting fortunes over the year, with many generalists seeing margins under continued pressure, while a sizeable band of confident City and insurance players rode the winds

With a combined total of 9,859 lawyers, 1,416 equity partners, £2.46bn in revenue and profits of £578.7m, the firms ranked 26-50 in the LB100 lag significantly behind the top 25 as a group.

Revenue at the average firm in the upper quartile of firms is up 9%, inflated by the wave of mergers that has boosted the income at firms such as Dentons and Herbert Smith Freehills, while firms ranked 26-50 managed average revenue growth of 7%.

Legal Business

Trainee Retention: Hogan Lovells, Travers and RPC reveal numbers

Trainee Retention: Hogan Lovells, Travers and RPC reveal numbers

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

Revolving Doors: DAC Beachcroft, RPC, K&L Gates and Reed Smith boost London offering with lateral hires

Revolving Doors: DAC Beachcroft, RPC, K&L Gates and Reed Smith boost London offering with lateral hires

London has been the focus of a series of hires for top national, City and US firms including DAC Beachcroft, RPC, K&L Gates and Reed Smith, as Dechert has also boosted its Moscow offering with a hire of a partner from Hogan Lovells.

Adrian Williams joins DAC Beachcroft’s corporate insurance team from reinsurance giant Swiss Re, where he was general counsel for Europe, Middle East and Africa, and was based in Zurich. The firm has also bolstered its real estate team in London with the hire of Nathan East from Hempsons. East specialises in advising medical professionals, care providers and the NHS.

‘We are delighted to welcome Nathan to the firm. His appointment adds an important extra dimension to our existing health practice with his considerable experience of advising GPs,’ said Eve Gregory, head of the firm’s health real estate team.

Elsewhere, 1,548-lawyer firm Reed Smith continues to grow its London office with the appointment of Eoin O’Shea as a partner in the firm’s global regulatory disputes practice based in London. Joining from Lawrence Graham (LG), O’Shea is known for his disputes work which includes economic crime, corporate crime, fraud and corruption disputes and investigations. He spent six years at the commercial bar and another six years with Simmons & Simmons before joining LG. O’Shea has led on litigation for major pharmaceutical companies relating to blackmail and other crimes.

‘Eoin’s reputation and his broad experience, across our key industry sectors and geographies, will ensure that Reed Smith is even better placed to assist clients facing the rapidly evolving regulatory landscape,’ said Richard Spafford (pictured), head of Reed Smith’s commercial disputes group for Europe and the Middle East.

‘O’Shea told Legal Business: ‘The reason I joined Reed Smith is because they are very strong in litigation worldwide. For my specialism in bribery and corruption it helps to have a strong group in the US.’

Reed Smith hired banking and finance partner Claude Brown from Clifford Chance in April this year.

Meanwhile, K&L Gates, which dropped three places in this year’s Global 100 to 25 with a turnover of $1,06bn, has added Anthony Fine as a partner in its energy, infrastructure and resources (EIR) practice in London. Fine joins from White & Case where he was head of the PPP/PFI practice in the firm’s energy, infrastructure, project and asset finance group.

‘With his track record in projects and infrastructure and his significant market connections, I am delighted that Anthony has joined our growing practice,’ said Tony Griffiths, London managing partner of K&L Gates.

Also growing in London with a number of recent heavyweight hires is RPC, which has brought in partner Sukh Ahark from Davenport Lyons, where he was head of banking and finance.

Ahark spent eight years at legacy Herbert Smith and has also worked for Pinsent Masons and Hammonds. Recent mandates he has advised on include luxury building company Harrison Varma Limited on the financing of a development of 20 new residential apartments, where the financing was provided by Barclays and Coutts.

‘We’re very pleased to have Sukh on board. His practice neatly complements our existing broad-based corporate offering, and his outgoing, unfussy and approachable style of doing business fits very well with how we operate at RPC,’ said Jonathan Watmough, managing partner of RPC.

Sukh’s appointment follows RPC’s hire of a three partner corporate team from Wragge & Co at the start of the year, consisting of former managing partner Richard Haywood, the head of corporate Maurice Dwyer, and David Marshall, a private equity specialist.

In Russia meanwhile, global top 50 US firm Dechert has recruited Taras Oksyuk from Hogan Lovells where he was head of real estate to lead the firm’s real estate and construction practice in Moscow. Deals that Oksyuk has advised on include leading Russian property fund, O1 Properties, on its $500m sale of a business centre in Moscow to Kaspersky lab.

Laura Brank, Moscow managing partner and head of Dechert’s Russia & CIS practice said: ‘We are very pleased that Taras is joining us. He is a highly regarded Russian real estate and construction expert who will bring a wealth of experience to our corporate and real estate practices in Moscow.’

david.stevenson@legalease.co.uk

 

To be included in future Revolving Doors round-ups please send your announcements to caroline.hill@legalease.co.uk

Legal Business

Consumer protection dragged into 21st century with new Bill that could open floodgates to class actions

Consumer protection dragged into 21st century with new Bill that could open floodgates to class actions

A Consumer Rights Bill published on Wednesday (12 June) is set to radically overhaul the rights of consumers in the digital age but could open the door to US-style class actions, lawyers warn.

The Bill was one of many announced in the Queen’s speech at the state opening of Parliament in May, and if enacted, will enhance consumer rights by making them easier to understand and streamline complex areas of consumer legislation into a single bill.

However, the Confederation of British Industry, speaking for some 240,000 businesses that together employ around a third of the private sector workforce, has highlighted the dangers behind a provision that allows members of the public, businesses or consumers to bring collective actions on an opt out basis.

Matthew Fell, the CBI director for competitive markets, said: ‘We will resist any efforts to introduce US-style class-actions into consumer redress, which risks fuelling a litigation culture and making the UK a worse place to do business.

‘Consumer law should be fit for the digital age but any changes must be properly scrutinised before they are put into practice.’

Hogan Lovells partner and product liability specialist Rod Freeman says they are right to be cautious. ‘It could lead to more litigation and that’s the greatest concern,’ Freeman said.

Speaking to Legal Business, he added: ‘The great concern is these measures on this side of the Atlantic are expressly intended to avoid the excesses that you see in the US class action regime, but the practical reality is the kind of infrastructure that’s been described is naturally going to attract those excesses. There are real questions on whether the safeguards being put in place will be effective.’

Few question that reform of the out of date consumer protection framework is necessary and consumer minister Jo Swinson said: ‘For too long, the rules that apply when buying goods and services have been murky for both consumers and businesses.’

This situation has worsened in the digital age, and the Bill specifically covers consumers’ ability to claim for faulty digital content, including film and music downloads, online games and e-books replaced.

Oliver Bray, commercial, IT and technology partner at Reynolds Porter Chamberlain said: ”There is lots of overlap and uncertainty with legislation including the sale of goods act which is now 30 years old. The messy backdrop is a complex patchwork of legislation. What was slightly bizarre is you have a consumer buying a CD with more protection than someone who is downloading music online.

‘This is going to be good for everyone. It’s simplifying and clarifying, and hopefully will make us more competitive. We are moving to a more sane world where digital content in particular is covered and there’s clearer lines of redress for services than before.’

Freeman added: ‘The area of consumer law in the UK is a mess. One of the great challenges is for the legalisation to keep up with changes in technology and changes in practices in the market. It’s important that it’s coherent, understandable legislation in dealing with digital content as much as it’s important for tangible goods and for services.’

Elsewhere, trading standards officers will be required to provide reasonable notice to businesses before carrying out routine inspections, as well as speedier and faster remedies for businesses that have been disadvantaged by breaches in competition law.

Consumers currently spend more than 59 million hours every year dealing with goods and services problems, according to a government statement published. The hope is that the new measures will reduce the effort consumers and businesses have to make to resolve problems.

sarah.downey@legalease.co.uk

Legal Business

RPC second City firm today to announce high double digit revenue increase

RPC second City firm today to announce high double digit revenue increase

Reynolds Porter Chamberlain has become the second City firm today (11 June) to announce a high double digit increase in revenue, with turnover up by 20% for 2012-13.

The top 50 LB100 firm has seen its revenue rise from £68m in 2011-12 to £82.1m this year. Its profits are yet to be announced.

The results come as top 20 City firm Clyde & Co also today revealed a hike in turnover of 17%, as the firm continues to reap the benefit of its 2011 merger with Barlow Lyde & Gilbert and following a period of international expansion.

The insurance focussed firm’s revenues have increased from £287m in 2012 to £336.6m in 2013, amidst a sluggish prevailing European economy. According to chief executive Peter Hasson, without including Barlow’s revenues, Clyde & Co would have reported a single digit growth of around 6%.

Clyde & Co has opened five new offices worldwide since the start of 2012, most recently in China (after obtaining a licence in Beijing), marking its eighth office in Asia. The firm also launched in Madrid with a four-partner insurance team from DAC Beachcroft in April, in Libya with the hire of local lawyer Albudery Shariha, and in Sydney and Perth after it hired an eight-strong local team from Allens.

Other UK firms to have revealed their 2012-13 results include Bird & Bird and Olswang. Bird & Bird has announced revenue growth of 6%, from £235m to £249m, marking 25 years of continuous growth. Profit figures are yet to be released although a firm spokesperson said that the expectation is that net profits will have risen again in 2012/13.

Meanwhile top 40 firm Olswang has reported a 3% growth in revenues, from £108m to £111.3m, slower growth than the 17% it posted last year. The 410-lawyer firm said that profit figures were subject to audit, it anticipated that its net income would be at roughly the same level as last year. However, this means average profit per equity partner will be around £510,000, down from £530,000 last year.

francesca.fanshawe@legalease.co.uk

Legal Business

Jonathan Watmough – RPC

Jonathan Watmough – RPC

Jonathan Watmough, Managing Partner, RPC

Increasingly I realise just how easy some of us in private practice have it compared to general counsel (GC) and in-house lawyers.

Law firms and their lawyers are inclined to be change resistant. Professional experience has conditioned them to be sensitised to the potential downsides arising from a course of action in preference to embracing the likely upsides. And even when they do accept that change is inevitable, often it’s a painfully slow process to effect – it’s hard enough to halt the progress of a supertanker, let alone change its course.

Legal Business

RPC expands corporate practice with partner hires

RPC has beefed up its corporate practice with the hire of three of Wragge & Co’s heavyweight partners as it targets more mid-sized deals for the largest FTSE 100 and 250 companies and multinational businesses.

The City Domestic firm hired Wragges’ former managing partner Richard Haywood and corporate head Maurice Dwyer. The duo joined fellow partner David Marshall at the beginning of the year.

Haywood was managing partner at Wragges from 2003 until 2006 and was also the firm’s corporate head. Most recently, he advised Premier Foods on the £182m sale of its canning division to Princes Foods.