Legal Business

Freshfields and Skadden face off as Japanese telco wins $1.2bn arbitration award from Tata Group

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Litigation Freshfields Bruckhaus DeringerSkadden, Arps, Slate, Meagher & Flom
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In one of the biggest cases for the London Court of International Arbitration (LCIA) this year, Skadden, Arps, Slate, Meagher & Flom and Freshfields Bruckhaus Deringer have advised as Tokyo telco NTT Docomo pursued $1.2bn in damages from a Tata Group linked company for a breach of shareholder agreement.

Skadden advised Tokyo-listed telecoms group NTT Docomo, which acquired a 26.5% stake in Tata Teleservices for $2.7bn, but announced its intentions to exit the venture after a series of setbacks.

NTT Docomo said the shareholder agreement gave it the right to request that Tata Group holding company Tata Sons would find a suitable buyer to purchase its shares for 50% of what it had paid or a fair market price. Tata Sons argued that Indian exchange control regulations prevented it from paying the agreed price, but the tribunal concluded that this did not mean it was excused from meeting its contractual obligations.

Tata Sons was advised by Freshfields in an all-British tribunal seated in London, which was chaired by One Essex Court QC Christopher Style, with former English Court of Appeal judge Lord Hoffmann and 20 Essex Street QC David Sutton serving as co-arbitrators.

Skadden London partner David Kavanagh and New York-based partners Lea Haber Kuck, John Gardiner and Greg Litt worked on the case for NTT Docomo, Japan’s largest mobile phone firm, along with Indian firm Khaitan & Co partner Sanjeev Kapoor. Freshfields London head of arbitration Nigel Rawding QC acted for Tata Sons alongside advocates Harish Salve, Darius Khambata and AZB & Partners in Delhi.

The mandate is the latest in a string of high-profile arbitrations for Freshfields which was recently hired by Oman’s largest sovereign wealth fund, the State General Reserve Fund of Oman, to sue Bulgaria over its role in the collapse of Balkan bank KTB. Bulgaria is being advised by Arnold & Porter.

Kavanagh said: ‘This is one of the largest cases in the LCIA in 2016 and one of the largest LCIA awards in recent years.  It was also very notable that the award was issued within just two months of the hearing so it is a great advert for the efficiency of LCIA arbitration.  Indian related disputes are a significant and growing area in international arbitration.’

madeleine.farman@legalease.co.uk

Legal Business

Revolving doors: DWF makes Scottish insurance play as Skadden and EY make key hires

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Strategic recruitment DWFEYSkadden, Arps, Slate, Meagher & Flom
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In this week’s appointments around up, law firms including Skadden, Arps, Slate, Meagher & Flom, DWF and accountancy giant EY have all key appointments.

DWF announced the launch of a counter fraud team in Scotland to enhance its national fraud offering to the firm’s insurer client base – which includes Aviva, QBE, RSA, Travelers, and Zurich – with the recruit of Jill Sinclair as partner from Harper Macleod to lead the team.

Sinclair will head the team and work within DWF’s national counter fraud team led by Lorraine Carolan, former national head of claims validation at DAC Beachcroft.

The launch follows the firm’s acquisition of insurance boutique Fox Hartley in May this year, a move which bolstered the firm’s offering in litigation and alternative dispute resolution services for insurer clients.

US firm Skadden announced last Thursday (23 June) the hire of Reed Smith private equity real estate (PERE) partner Robert Porter as of counsel to its London office. Porter advises PERE firms, sovereign funds, property companies and financial institutions on UK and European real estate funds, joint ventures, M&A, financings and structured transactions across Europe and the Middle East. Porter, a former partner at CMS Cameon McKenna and Clifford Chance, will now head Skadden’s European PERE initiative.

Meanwhile, Big Four accountancy firm EY expanded its legal offering across Chile and Argentina with the hire of Jorge Garnier from Argentine power company Genneia, where he served as senior legal counsel, as an executive director to build a team focusing on corporate law. In Chile, the firm recruited Paola Bruzzone from retailer Falabella where she was general counsel. Her move to EY will see her lead the legal services group, which will focus on corporate and commercial law. The Chilean practice will initially focus on core offerings around corporate and commercial law, M&A and employment law.

EY also added to its legal team in Canada, where Toronto-based Norton Rose Fulbright corporate partner Anthony Kramreither joined EY Law to lead its business law team.

EY global law leader Cornelius Grossmann, said: ‘New legislation and compliance measures demand that we provide more expansive legal services globally. These key hires provide the breadth and experience required to deliver multidisciplinary services as we continue to acquire the leading talent for our growing teams.’

sarah.downey@legalease.co.uk

Legal Business

Skadden names NY-partner as enforcement head in London in global investigations push

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Skadden, Arps, Slate, Meagher & Flom
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Skadden, Arps, Slate, Meagher & Flom has boosted its City-based investigations practice having relocated white collar partner Keith Krakaur (pictured) from New York to London to head the firm’s European government enforcement and white collar crime practice.

A senior partner and a former federal prosecutor, Krakaur has represented corporate and individual clients in global investigations involving economic sanctions, corrupt practices, money laundering, tax and accounting fraud. He recently advised Crédit Agricole in its resolution of a seven-year, multi-agency sanctions investigation, and ten banks in obtaining non-prosecution agreements under the US Department of Justice’s (DoJ) Swiss Bank Program.

The moves comes as the firm bulks up its international government enforcement and corporate investigations capabilities, having added Hong Kong-based partner Steve Kwok who was the former resident legal adviser for the US DoJ in Beijing, and relocated partners Ryan Junck to London and Bradley Klein to Hong Kong.

There are currently three partners in London, including Krakaur, that focus on corporate crime who work as part of wider government enforcement and white collar team across Europe in Paris, Munich and Moscow.

The London corporate crime practice comes ranked in the top tier in The Legal 500, whichalso recommends Junck.

Skadden’s London office head Pranav Trivedi said: ‘Keith’s leadership will be a significant asset to our capabilities in London and on the European continent as we continue to enhance one of the world’s premier government enforcement and white collar crime practices.’

Krakaur added: ‘Companies – and their executives and boards – are facing a highly challenging global enforcement environment. As US enforcement agencies expand their reach and cooperate with their counterparts in Europe, Asia and the Middle East, we are often asked to quarterback complex, cross-border investigations. I look forward to serving our clients on the ground in London and as a bridge to our white collar capabilities throughout the world.’

jaishree.kalia@legalease.co.uk

Legal Business

US law firms’ secret deal weapon blunted as Pfizer pulls plug on $160bn inversion bid

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Corporate Skadden, Arps, Slate, Meagher & Flom
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The wave of ‘inversion’ bids into Europe from US companies could be set to end, with the strategy pioneered by Skadden, Arps, Slate, Meagher & Flom hit this week as US drug maker Pfizer terminated its $160bn deal to acquire Allergan amid US tax reforms.

Pfizer’s tie-up with the Ireland-based Allergan was set to become the largest ever inversion deal, the controversial structure in which US corporates reduce domestic taxes after taking over foreign companies and switching domicile to lower tax nations. Under the deal, Pfizer would have moved its headquarters to Dublin, where corporation tax is 12.5% compared with 35% in the US.

The tactics have been contentious in the US, where president Barack Obama (pictured) has branded such bids an ‘unpatriotic tax loophole’.

The US Treasury Department ramped up the pressure on Pfizer on Monday (4 April) by releasing its third and most far-reaching set of curbs on inversions in a move regarded as explicitly aimed at this deal.

Pfizer confirmed today (6 April) that it was abandoning the deal, citing ‘actions announced by the US Department of Treasury…, which the companies concluded qualified as an “Adverse Tax Law Change” under the merger agreement’.

The US pharma giant also said it would pay $150m to cover Allegan’s expenses. Pfizer’s total costs on the bid have been estimated as high as $400m.

While curbs on inversion deals may not be a stake through the heart, there is now uncertainty as to their future after helping law firms to cash in on a record year for M&A as inversions helped to drive buyers to spend $3.8trn on M&A in 2015, the highest amount ever, according to Bloomberg.

The development also comes as a reverse to Skadden, which famously pioneered the deal structure after lawyers at the firm came up with the idea on a bike ride through France organised by Scott Simpson, the firm’s global transactions co-head. The wave of inversion deals into Europe helped Skadden become the first law firm to advise on over $1trn of announced M&A deals in a single year in 2015. But this is the second high-profile inversion deal Skadden has advised Pfizer on to fall through, following the collapse of its attempt to combine with UK rival AstraZeneca in 2014.

Skadden’s team advising Pfizer on corporate and tax matters is led by New York-based M&A partners Paul Schnell, Sean Doyle and Michael Chitwood. Wall Street leader Wachtell, Lipton, Rosen & Katz and Dublin’s A&L Goodbody were also advising Pfizer.

Allergan are advised by Cleary Gottlieb Steen & Hamilton, Latham & Watkins and Ireland’s Arthur Cox.

One City partner told Legal Business: ‘The stuff that came out of the US Treasury obviously has consequences for Pfizer that are striking, but this story has a long way to run…everyone said tax inversion was dead 18 months ago.’ He added: ‘It will be interesting to see whether the end result is as dramatic as it appears today.’

Freshfields Bruckhaus Deringer partner Bruce Embley commented: ‘People will increasingly focus on termination fees and similar arrangements, where there is a deal where there is a real risk from external factors.’

Despite the reverse for US advisers, the news comes amid a period in which top American law firms are pushing into mainstream deal work in the City, a trend helped by a string of major transatlantic bids, robust private equity activity and the vogue for US-driven financing.

tom.moore@legalease.co.uk

Legal Business

Cravath and Skadden check-in as Starwood derails Marriott merger to seal Chinese hotel takeover

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Dealwatch Cravath, Swaine & MooreGibson, Dunn & CrutcherSkadden, Arps, Slate, Meagher & Flom
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Cravath, Swaine & Moore, Skadden, Arps, Slate, Meagher & Flom and Gibson, Dunn & Crutcher are advising as Westin owner Starwood Hotels & Resorts Worldwide has called off its $12.2bn buyout agreement with Marriott in favour of a $13.2bn offer from a group of investors led by China’s Anbang Insurance Group.

The consortium, which comprises Anbang, J.C. Flowers & Co. and China’s Primavera Capital, are offering to acquire all of the outstanding shares of common stock of Starwood for a $78 per share in cash, an increase from the $76 per share proposal made by the consortium’s previous bid earlier this month.

According to the Starwood board, Anbang’s proposal constitutes a ‘superior offer’ and ‘the binding and fully financed proposal from the consortium provides a high degree of closing certainty’.

Cravath is representing Starwood with a team led by corporate partner Scott Barshay. The firm is also representing Starwood in connection with its existing agreement with Marriott.

Anbang has instructed Skadden as its legal adviser in the takeover bid with New York-based M&A partner Eileen Nugent, who is also the firm’s global co-head of transactions.

Advising Marriott is Gibson Dunn & Crutcher co-chair of the M&A practice group Stephen Glover. Marriott’s earlier deal with Starwood worth $12.2bn, would have catapulted it to become the world’s largest hotelier by a wide margin, adding 50% more rooms to Marriott’s portfolio.

The Chinese firm has been an aggressive buyer of US hotel properties of late and already owns New York’s iconic Waldorf Astoria.

jaishree.kalia@legalease.co.uk

Legal Business

All change Down Under as Skadden closes Sydney office after 27 years

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Asia Skadden, Arps, Slate, Meagher & Flom
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Clifford Chance sees senior exits as Clydes makes more hires in region

The Australian market saw some of the world’s largest firms make changes last month, including Skadden, Arps, Slate, Meagher & Flom, which shut its small Sydney practice after nearly three decades of operation.

Legal Business

Aussie exodus: Skadden closes sole office in Sydney

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Asia Skadden, Arps, Slate, Meagher & Flom
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Skadden, Arps, Slate, Meagher & Flom has confirmed it is closing its Sydney office – the US firm’s only base in Australia. The six-staff office will shut down in the first half of this year with all staff understood to be departing from the firm aside from co-head of Skadden Arps corporate finance group Adrian Deitz who will remain based in Sydney and operate as part of the firm’s Singapore and Hong Kong team.

The rest of the corporate-focused team, which comprises one partner, one retired, two counsel and one associate are understood to be reviewing their options.

Skadden Arps first launched in Sydney in 1989 and since represented Australian and New Zealand clients on the US aspects of cross-border transactions, such as corporate finance and M&A deals.

Highlight deals for the office, listed on the firm’s website date back to 2014 and include representing the Commonwealth of Australia and Medibank Private on Medibank’s A$5.679bn initial public offering and listing on the Australian Stock Exchange; and advising Meridian Energy in its partial privatisation and $1.6bn initial public offering by the government of New Zealand, which was done in 2013.

The news follows two of the founders of Clifford Chance’s Australian arm, including the firm’s Sydney managing partner, confirming they are stepping down from their roles at the Magic Circle firm on Tuesday (9 February).

Elsewhere down under, Clyde & Co hired two partners from Norton Rose Fulbright in a bid to build up its occupational health and safety team in Sydney, with Michael Tooma and Alena Titterton joining along with eight other lawyers. This followed the firm’s appointment of a 30-lawyer team late last year, also in the Sydney office after it picked up five partners who joined the firm with another 25 lawyers, all from Lee & Lyons.

jaishree.kalia@legalease.co.uk

Legal Business

Skadden and Freshfields top global deal tables as M&A figures reach record heights

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Corporate Freshfields Bruckhaus DeringerSkadden, Arps, Slate, Meagher & Flom
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In a record year for global M&A, US firm Skadden, Arps, Slate, Meagher & Flom and Magic Circle firm Freshfields Bruckhaus Deringer were the top performers in the US and Europe respectively, according to Dealogic’s 2015 league tables.

As worldwide deal volumes surpassed $5trn for the first time, global attorney rankings for corporate advisory work show Skadden was top of the class, advising on 293 deals worth over $1trn, beating out rivals including Wachtell, Lipton, Rosen & Katz which came second with 130 deals valued at $733.1bn, Latham & Watkins which came third with 302 deals totaling $590.2bn, followed Freshfields with 190 deals worth $587.6bn.

Skadden also came out on top in US attorney rankings, advising on 203 deals valued at $881.9bn. Notably Weil Gotshal & Manges has fallen several places. While the firm had taken the top spot in the global attorney rankings and US attorney rankings in 2014, it now sits in sixth and fourth place respectively for these categories.

Meanwhile, Freshfields retained its title as top firm in the European attorney rankings, advising on $418.4bn worth of deals, while other Magic Circle firms Linklaters, Clifford Chance and Slaughter and May came third ($228.8bn), fourth ($221bn) and sixth place ($200.3bn) respectively. New entrants in Europe’s top ten lawyer rankings included Cleary Gottlieb Steen & Hamilton in seventh place (2014: 12th) and Hogan Lovells in ninth (2014: 15th).

De Brauw Blackstone Westbroek leapt to eighth place from 38th in 2014. Major deals for the Dutch firm last year included Shell’s £47bn acquisition of BG Group alongside Slaughter and May and Freshfields, as well as the $1bn IPO of Grand Vision, the owner of Vision Express, alongside Linklaters and Davis Polk & Wardwell.

EMEA targeted deal flow accounted for 22% ($1.13trn) of global M&A, a record low and well below the average for the last ten years which stood at 35%. One of Europe’s biggest deals was in the food and beverage industry, with Anheuser-Busch InBev’s £71bn proposed takeover bid for SABMiller, an agreement which a host of firms including Freshfields and Linklaters advised on.

US targeted M&A volume reached a record high of $2.47trn, up 59% on the year before, from $1.55trn . Healthcare was the top ranked sector in 2015 with $724.4bn, up 66% from 2014 ($436.4bn) and technology came closely behind with record high volume and activity of $715.7bn via 9,367 deals, over double the 2014 total ($327.4bn).

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: US firms line up as Russia’s largest driller prepares exit from London stock exchange

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Dealwatch Skadden, Arps, Slate, Meagher & FlomWillkie Farr & Gallagher
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The management of Eurasia Drilling Company Limited is being advised by US firm Willkie Farr & Gallagher as it prepares to sell to major shareholders and exit the London stock exchange, after Schlumberger gave up on a deal to buy into the company.

Eurasia’s special board committee, which recommended the delisting deal, is being advised by a Willkie Farr team led by partner François Feuillat and associate Matteo Matteucci, while Maples and Calder are representing the committee in the Cayman Islands. Feuillat had acted for the committee in its failed deal with Schlumberger when he was at Vinson & Elkins and the client returned to him after he joined Wilkie Farr in July.  

Skadden, Arps, Slate, Meagher & Flom which had acted for EDC Acquisition Company in the failed Schlumberger deal, reprised their role for the negotiations. Skadden partner Danny Tricot was the lead partner for the buy-out group, which is also being advised by Walkers in the Cayman Islands.

The proposed transaction is a Cayman Islands merger which requires approval from a two-third majority of shareholders, and is expected to be finalised in November.

Feuillat told Legal Business the recent Integra case out of the Cayman courts supports minority shareholders so lawyers took extra care during the process and ensure valuations were done properly, requiring co-operation between the lawyers and financial advisers involved.

Any legal challenge from minority shareholders over the fair value of the company was unlikely to succeed, Feuillat said, because the Integra precedent was followed closely. 

victoria.young@legalease.co.uk

Legal Business

Skadden hires new Paris tax head as Linklaters is served with another partner exit

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Strategic recruitment LinklatersSkadden, Arps, Slate, Meagher & Flom
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Skadden, Arps, Slate, Meagher & Flom is ramping up its Paris offering, having hired Linklaters tax partner Thomas Perrot to head its French tax practice.

The tax specialist will join Skadden in early November in the newly created role of tax head in Paris. The addition takes partner headcount at the Paris office to four. While the current three partners – which includes Paris head Armand Grumberg – focus on M&A, Perrot will lead the firm’s French tax practice that also includes counsel Philippe Derouin.

Perrot focuses on domestic and international M&A-related tax matters for listed and non-listed companies, as well as tax issues in connection with finance and financial instruments. Some of his recent deals at Linklaters included representing LBO France and Médi-Partenaires on its €385m high yield bonds and €60m revolving credit facility; and advising CVC Capital Partners on the acquisition of the Delachaux followed by a takeover bid for the shares held by the public.

He was made a partner at Linklaters in 2012 after joining the Magic Circle firm in 2007 as counsel.

Grumberg said: ‘We are delighted that Thomas is joining us. His in-depth knowledge and experience in complex tax matters is a perfect fit for our office and our different practices, and he will add great value for our clients.’

London-based James Anderson, who heads Skadden’s European tax practice, added: ‘Thomas is very highly regarded within the French and international markets, and is a superb addition to our European tax team at a time of great change in cross-border tax law.’

The hire follows Skadden’s appointment of French M&A and private equity lawyer Olivier Diaz in Paris earlier this year, from local firm Darrois Villey Maillot Brochier where he was co-managing partner.

While Skadden ramps up in Paris, Linklaters, on the other hand, is suffering a series of partner exits from a mix of jurisdictions. Kirkland & Ellis recently hired corporate partner Roger Johnson in what is its fourth partner hire this year from rival Linklaters.

Linklaters’ Asian offering also suffered a blow after Kirkland hired Hong Kong debt finance partner David Irvine earlier this month to boost its Asia business. This followed Linklaters losing finance and energy partner Thomas Ng in April and capital markets partner David Ludwick in March, who both joined rival firm Freshfields Bruckhaus Deringer in Hong Kong, while Davis Polk & Wardwell also hired capital markets partner Jon Gray from the Hong Kong office.

jaishree.kalia@legalease.co.uk