Investment funds: Schulte Roth to grow London practice with move to bigger City premises

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Schulte Roth & Zabel’s (SRZ’s) 80-strong top-tier transatlantic funds practice is set to grow after the US firm announced this week it is to move to bigger premises in the City on the back of increasing demand from its European clients.

The firm aims to grow its international practice focusing on cross-border insolvencies, restructurings, distressed mergers and acquisitions, distressed investing and debt trading. Continue reading “Investment funds: Schulte Roth to grow London practice with move to bigger City premises”

Financial squeeze – Morgan Stanley declares a hit to net income due to $1.2bn in legal costs

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Morgan Stanley is the latest major financial institution to declare that it has been hard hit by litigation and the ripple effect of the financial crisis after it reported a fourth quarter 78% drop in net income to $192m due to legal costs and weak fixed income trading.

Revenue for the period rose from $7bn to $7.8bn but legal costs of $1.2bn meant that earnings for the quarter were almost wiped out, the FT reported on Friday (17 January).

In its report the US investment bank declared that ‘the current quarter includes $1.2 billion of additions to legal reserves for mortgage-related matters, specifically litigation and investigations related to residential mortgage-backed securities and the credit crisis.’ Continue reading “Financial squeeze – Morgan Stanley declares a hit to net income due to $1.2bn in legal costs”

Shearman settles controlling stake in Co-operative Bank for US hedge funds

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Behind the scenes of the first-ever creditor bail-in of a bank in the UK.

Last month The Co-operative Group’s £1.5bn recapitalisation plan for its beleaguered banking arm unravelled as subordinated bondholder activists advised by Shearman & Sterling negotiated hard and settled on a controlling stake of 70% of the shares of the bank.

Under the agreement, bondholders including US hedge funds led by Aurelius Capital Management and Silver Point Capital – dubbed the LT2 Group as they hold subordinated bonds – will receive 70% of the shares in The Co-operative Bank plus £100m in newly-issued securities. They will also inject £125m of fresh capital into the bank while parent company The Co-operative Group will retain a 30% stake. Continue reading “Shearman settles controlling stake in Co-operative Bank for US hedge funds”

Punch above weight – the finance teams aiming to take on the City’s heavyweights

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As confidence begins to re-emerge at City finance teams, Legal Business profiles the mid-market players intent on challenging the Square Mile’s banking heavyweights

Bernard Sharp, global chair of the banking and finance group at Baker & McKenzie, may be tempting fate when he says: ‘The market has a lot in common now with the market in 2007.’ Still, his comment certainly reflects a more bullish mood among a cadre of players operating just below the largest six or seven banking practices in the City.

Continue reading “Punch above weight – the finance teams aiming to take on the City’s heavyweights”

Guest post: Independence matters – banking and big law in the news

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Lawyers and banks are in the news again. Lawrence Tomlinson, Entrepreneur in Residence at the Department for Business, Innovation and Skills, has reported various abuses by RBS in particular and has this to say about the way banks instruct lawyers:

‘Any law firm that does business with the banks will have a clause in their contract, preventing them from taking action against the banks.This means that for businesses the pool of solicitors available to give them advice and take their case is extremely limited. Continue reading “Guest post: Independence matters – banking and big law in the news”

High yield, high stakes – DLA Piper makes key investment in deal finance with hire of ex-CC partner

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It’s historically proved one of the hardest practice areas for City firms to break, proving often impenetrable for even elite London players, but DLA Piper is hoping its Anglo/American reach can help it make a mark in one of the most lucrative areas of deal finance.

In a major investment in its City finance team, DLA Piper has recruited former Clifford Chance (CC) high yield and leveraged finance specialist Tony Lopez, who joins the firm’s eight-partner London structured finance team today (4 November).

Continue reading “High yield, high stakes – DLA Piper makes key investment in deal finance with hire of ex-CC partner”

UPDATED: BLP launches independent review of finance practice after team head departs

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Berwin Leighton Paisner‘s (BLP’s) head of banking and finance Matthew Kellett is to leave the firm, it was confirmed today (30 October), with BLP launching an independent review of its finance practice.

A spokesperson for the firm said: ‘Matthew Kellett has decided to leave BLP to pursue his business and other interests. Matthew will stay in his role until a successor has been appointed. The finance team continues to retain significant clients and is involved an increasing amount of international and multi-practice work.

Continue reading “UPDATED: BLP launches independent review of finance practice after team head departs”

Deutsche Bank profits dive amid €1.2bn legal provision as pressure builds on finance leaders

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If anyone still doubts the mounting legal burdens now falling on the world’s largest finance houses Deutsche Bank has this week dispelled such thoughts after announcing a fresh €1.2bn provision to cover its legal costs.

The German banking giant today (29 October) reported a 98% fall in quarterly profits after setting aside additional funds to cover its liabilities, reflecting the mounting regulatory burden facing the financial institution. The bank’s group income before taxes dropped for the third quarter to €18m, against last year’s figure of €747m for the same period in 2012.

Continue reading “Deutsche Bank profits dive amid €1.2bn legal provision as pressure builds on finance leaders”

Increased scrutiny of finances by insurers as 185 firms fail to get PII by first cut off

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Insurers are joining banks in upping their scrutiny of law firm finances in light of recent insolvencies as 185 law firms fail to obtain professional indemnity insurance (PII) by the 1 October deadline.

The Solicitors Regulation Authority (SRA) received applications for an extended indemnity period (EIP) from 185 law firms. Of those firms, ten have since secured cover, leaving 175 firms in need of PII before the end of the 90-day period afforded by the EIP. Continue reading “Increased scrutiny of finances by insurers as 185 firms fail to get PII by first cut off”

Record breaking $49bn Verizon bond issue sees Debevoise and Davis Polk secure lead roles

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Debevoise & Plimpton and Davis Polk & Wardwell have landed roles on Verizon Communication’s record breaking $49bn US bond issue. The deal is bigger than the three previous record sized deals combined: Apple’s $17 billion deal in April, AbbVie’s US14.7 billion last November and Roche Holdings’ $13.5 billion transaction in 2009, according to Reuters, which also points out that the issue is larger than the GDP of 90 countries.

Debevoise is advising Verizon, with a New York team led by corporate chair Jeffrey Rosen, corporate partners Michael Dis and Steven Slutzky working alongside tax partner Peter Furci.

Davis Polk is advising the underwriters J.P. Morgan, Morgan Stanley, Barclays Bank, Merrill Lynch and Pierce, Fenner & Smith as joint lead arrangers and joint bookrunners. Continue reading “Record breaking $49bn Verizon bond issue sees Debevoise and Davis Polk secure lead roles”