Allen & Overy
In the capital markets sphere, Allen & Overy is better known for its debt and derivatives practice than equity. However, at a firm with the size and standing of Allen & Overy the mandates will still arrive and the equity team can still point to some notable mandates and clients which raises it higher than many in the market....
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In the capital markets sphere, Allen & Overy is better known for its debt and derivatives practice than equity. However, at a firm with the size and standing of Allen & Overy the mandates will still arrive and the equity team can still point to some notable mandates and clients which raises it higher than many in the market.
Clients were certainly impressed: "The partners tend to be pretty engaged and pretty front and centre. There is also a question of how much is too much but the key people at meetings are usually the partners," says one.
The equity team is led by Mark Dighero and last year he, alongside Louise Wolfson and Robert Williams acted for the joint sponsors including Goldman Sachs, JPMorgan Cazenove and UBS, the co-lead managers Jeffries, Lloyds TSB and Numis and the co-bookrunners Barclays and HSBC on the IPO of supermarket chain the Ocado Group. The deal was one of the most substantial in the market last year and raised £463 million.
Another major IPO was that of the Betfair Group. David Broadley and Robert Williams acted for the joint sponsors Goldman Sachs and Morgan Stanley and co-lead managers Barclays and Numis. Raising over £210 million, the IPO further established the group as the largest online betting provider.
A lot of eyes have turned east this year, with great interest being generated by offerings placed on the Warsaw Stock Exchange. Allen & Overy last year found themselves advising on the IPO of the exchange itself. The exchange is seen as a hub for the CEE (Central & Eastern Europe) region and generated a substantial amount of interest from investors.
Outside of IPOs, the team also advised the bookrunners including Bank of America Merrill Lynch, BNP Paribas, Citi, Credit Suisse and EFG Hermes on the $800 million rights issue of Egyptian company Orascom Telecoms Holding.
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Leading lawyers
Mark Dighero
Allen & Overy
"A&O I would rank them where they are because in addition to having a very good team, the market is in the right place for them in terms of restructuring work. They are going to continue to plough on in the next couple of years....
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"A&O I would rank them where they are because in addition to having a very good team, the market is in the right place for them in terms of restructuring work. They are going to continue to plough on in the next couple of years."
This comment by one peer sums up how Allen & Overy continues to be seen in this market. A strong and deep bench and excellent client relationships within the bank lending sphere provides the firm with a solid base which backs up its tier one ranking.
Where weaknesses arguably lie are in the firm's underwriter capacity and in its Russian offering. The second point is balanced by its extremely strong pedigree in the Middle East (boosted by a recent office opening in Qatar). However with Russia presently producing a strong pipeline for London firms, peers suggest that closest rivals Linklaters have the edge. "Allen & Overy, who really aren't strong in Russia, are very strong in the Middle East, otherwise I think on other products they [tier one firms] are probably evenly matched I would say," says one partner.
A clear example of the firm's strength in the Middle East was its advice to Qatar Holdings on its purchase of $1.7 billion and SFr2.5 billion Tier 1 Buffer Capital Notes (BCN) in the form of Coco bonds from Credit Suisse.
Leading that deal were Jonathan Mellor and Stephen Miller and the latter also assisted Bank of Ireland on its latest rights issue and debt for equity exchange offer.
Miller was praised widely by clients: "One of the best in the business for UK capital security, he is second to none," says one, "very commercial and user friendly," and it seems this ability is reflected by the team around him with one client describing them as "very strong, best in their field in terms of what we work on".
A key element of any firm's Middle East offering is the ability to handle Islamic finance and A&O demonstrated this last year advising Etisalat on its $1 billion asset-based sukuk (Islamic bond) programme. The innovative structure contains both an ijarah (capital leasing) element and an airtime-based structure that uses minutes used on a phone network as the asset base.
With Turkey a keen area of interest for UK firms at the moment, Allen & Overy enhanced its reputation last year as it advised the joint lead managers (Bank of America Securities, Citigroup Global Markets, JPMorgan Securities and Standard Chartered) on Akbank's Rule144A/RegS $1 billion bond issue, the first ever international bond issue by a Turkish bank.
Matthew Hartley was another individual that impressed, with one client describing him as "a really safe pair of hands, he's got a very considered and mellow style. He doesn't rant or throw his toys out of the pram and is absolutely on top of his products".
Though reports over the health of the convertible market have been mixed, the firm got one notable deal in the last year as partners Max Aaron and Jonathan Mellor advised Barclays Capital as bookrunner on a $200 million dollar convertible issued by the Sea Trucks Group. The deal forms part of the company's preparation for its proposed IPO.
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Leading lawyers
Jonathan Melton
Stephen Miller
Roger Wedderburn-Day
Boyan Wells
Allen & Overy
Like many of its UK peers, the perception exists that Allen & Overy's High-yield offering is very much based around one key partner. In this case Kevin Muzilla....
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Like many of its UK peers, the perception exists that Allen & Overy's High-yield offering is very much based around one key partner. In this case Kevin Muzilla. "I think they've had a number of prints where they've been fed from the company side and that's the one where it really is a one man band," says one rival partner.
There are signs however that the firm is gaining traction and will no doubt look to boost numbers if the work continues to be prevalent in the market. "Allen & Overy took Kevin Muzilla from Milbank and whatever his reasons for leaving, he was at least an established player and I think that's helped them and they've done some deals," says another peer.
In 2010 the firm took on Jacob Minas as of counsel from Cahill Gordon & Reindell in New York as it looks to increase its capacity.
The team has managed to achieve a good balance between bank and company side mandates. In the former, Muzilla had a hand in two of the most prominent, acting for Goldman Sachs and Citi on an issue of €500 million in senior notes by Alcatel Lucent and JPMorgan and Trokia Dialog on a $200 million issuance of 10% notes by Avangard.
On the company side, Muzilla was again involved acting for Cable & Wireless on a $500 million issuance and Manchester United on two issues of senior secured notes, one valued at $425 million and one at £250 million.
Another highlight, which draws the eye, saw a team consisting of Muzilla and Boyan Wells acting on the establishment of the first ever high-yield EMTN programme. Acting for Deutsche Bank and Morgan Stanley, the programme, initiated by the Eurasian Natural Resources Corporation, is valued at $3 billion.
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Leading lawyers
Kevin Muzilla
Allen & Overy
Allen & Overy's derivatives team, now run by partner David Benton, continues to be the market leading practice. The team's experience, its name and the reputation of its partners are one thing, add in the firm's much-coveted position as lead counsel to Isda (International Swaps & Derivatives Association) and it becomes difficult to argue with the firm's lead ranking....
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Allen & Overy's derivatives team, now run by partner David Benton, continues to be the market leading practice. The team's experience, its name and the reputation of its partners are one thing, add in the firm's much-coveted position as lead counsel to Isda (International Swaps & Derivatives Association) and it becomes difficult to argue with the firm's lead ranking. "They are obviously very good, but they are consistently good which doesn't run through all the tiers," says a peer.
Client feedback backed this position to the hilt: "Second to none. Crown jewels in this field," says one client. "Benton is good on derivatives, very good at the letter of details, looks beyond the obvious and they are business oriented." Certainly Benton seems to be a good figurehead: "Exceptional. David is a market guru with a massive reputation," says another client.
The future looks in safe hands too: "I worked with Tom Roberts, a mid-level associate, was calm, got the job done and gave the right advice," says another client. "Cracking detail drafting man."
However, peers do point out that the firm is not as untouchable as it may have been perceived prior to the financial crash or indeed in the immediate aftermath. The direct challengers are Linklaters who have their own bragging rights in the form of links to LCH Clearnet. "It's no particular surprise to see Allen & Overy in the top tier," says one peer, "but you could make an argument for Links to be up there too." By a narrow margin though, the feeling was that there is for the moment only one seat at the top table. "I think there probably is still some blue sky between Links and A&O," says one peer and another agrees, "We know A&O have downsized slightly in terms of numbers and have not been taking people on, but I think there is still a gap there."
Strength across the asset classes is a key signifier of a top practice and Allen & Overy can point to recent mandates in almost all the key areas of derivatives.
With clearing being the hot topic it's no surprise that the team has been kept busy advising a number of key clients in terms of putting structures in place to allow them to synchronise with central clearing authorities. This has included work for Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and RBS to name but a few in their reviews of the rules and procedures of major clearing houses ICE Clear, ICE Trust and LCH Clearnet as part of their compliance in regard to Dodd-Frank and Emir.
The team has also taken the initiative and set up various working groups and updates to keep clients abreast of developments in regulation changes.
Isda work of course also remains a feather in the firm's cap. Although no longer the body's sole advisor, as lead counsel it remains the first port of call, "A&O act for Isda so they've clearly got the perceived market lead," says one peer.
This status as premier advisor was shown last year as the firm chaired and acted as lead advisor on Isda's Financial law Reform Committee which coordinates the body's various global reform efforts. The team has also been called upon to help draft consultation responses on specific issues including the strengthening of close-out netting procedure in relation to proposed EU regulation and the resolution of cross-border issues relating to the World Bank Insolvency Law Task Force.
The team has also advised on proposed amendments to the Isda Master Agreement including Section2(a)(iii) – which arose out of the UK High Court Case Lomas vs JFB Rixon – and the definitions of various terms within the agreements in the light of reforms.
Clients were also keen to point out the added value the firm adds through training, seminars and updates: "They offer a lot of training sessions, a lot of free advice as well as providing secondees to see what we do day to day," says one, "It also allows them to gain insight of our business and therefore highlights our positive areas which in turn reflects well on us." Another adds: "Good at regular contact, making as aware of new development or specific transactions. Highly valued as a client, you do feel like they put the firm at your disposal."
The firm has also acted in other growth areas of the market including advice on carbon structures, housing finance and notably Islamic finance structures. The market in shariah-compliant structures is young and under-developed and numerous procedures have been put in place to stimulate the market. In this area the firm has been heavily involved in the development of a framework for Islamic derivatives including the drafting of the Isda/IIFM Tahawwut Master Agreement, which would allow murabaha (deferred sale) hedging transactions to be documented, and a template for sukuk (Islamic bond) credit default swaps.
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Leading lawyers
David Benton
Simon Haddock
Edward Murray
Richard Tredgett
David Wakeling
Allen & Overy
Allen & Overy maintains its position in the top tier of the structured finance and securitisation table this year based on the wider strength of its team in these areas and its market leading derivatives practice."Excellent, very strong, leaders in their field....
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Allen & Overy maintains its position in the top tier of the structured finance and securitisation table this year based on the wider strength of its team in these areas and its market leading derivatives practice.
"Excellent, very strong, leaders in their field. Extremely competent and suggest solutions. Extremely knowledgeable of the business area, very up to date with the regulatory environment," says one client and another agrees, again highlighting the firm's regulatory knowledge: "Very good law firm. Consistently gave strong advice on transactions, they are the cutting edge on regulatory development."
A key pillar of the firm's work this year has been the mandates emerging from the re-emerging CLO and structured products markets. Both Tony Drake-Brockman and Daniel Shurman have been extremely active, with the former advising Deutsche Bank on its Global Investor Solutions I collateralised issue in Italy. Shurman meanwhile advised Credit Suisse, Morgan Stanley and Barclays in regard to structured equity linked deposits covered by FSCS protection. He also advised Barclays Capital on the structuring of structured Ucits (Undertakings for Collective Investment in Transferable Securities) funds.
Both partners have also acted alongside David Wainer and Andrew Sulston on a variety of secured and unsecured note programmes for the like of Nomura, Macquarie and VTB Capital.
The firm's network also impressed clients: "Italy, Amsterdam, Paris, all a similar standard to London," says one, though they add that "communications between London and Milan could have been better".
On the securitisation side, the team led by Salim Nathoo has strengthened its US law capacity on both sides of the Atlantic with the addition of asset-backed securities specialist Hank Michael in London and the arrival of Ed de Sear in New York.
Nathoo is held in high regard by clients: "One of the best securitisation lawyers in the London market, he has in-depth knowledge of securitisation issues which extends across a number of asset classes," says one client, "He understands the fundamentals of typical securitisation structures and the ability to look at new regulatory issues. He has an immediate knowledge and the ability to foresee what is needed for our business."
Nathoo was active last year advising Nationwide on a £1.5 billion RMBS issue into the US market. Issued through the Silverstone master trust programme, the issue was the first ever by a UK building society into the States.
One of the firm's largest transactions in the resurgent CMBS market saw Christian Lambie acting for Goldman Sachs and HSBC as lead arrangers on Tesco Property Finance's third credit tenant-linked CMBS-style financing valued at £958 million. This was followed by further advice on the fourth programme this time for £685 million advising JPMorgan in addition to Goldman and HSBC. The deals draw their value from the strength from the solid payment stream of the underlying leases.
The team hammered home its advantage in the market last year acting on a number of firsts. In one example Tim Conduit advised Andromedia on the first Italian project bond. In a growing area of the market, the deal won IFLR magazine's European award for Securitisation and Structured Finance Deal of the Year 2011 for the transaction which saw a dual issue of €97.6 million in Class A1 and A2 Notes due in 2028. The deal was also the first time the Italian export credit agency SACE had backed a public renewables bond for a project. The deal structure saw loans granted to Andromedia PV being transferred to Andromedia Finance utilising Italy's securitisation law.
Conduit was gain involved acting for Bank of New Zealand's first covered bond programme and an initial issuance under that of NZ$175 million (£82.5 million) of five year bonds and NZ$250 million of seven year bonds. The team also advised the bank on the programme's listings on the Luxembourg stock exchange.
Completing a treble of notable transactions Conduit also advised Citi as the bookrunner, Citigroup Trustee Company as the trustee and Japan Bank for International Cooperation as guarantor on a securitisation of revolving auto loans, the first ever done in the UAE.
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Leading lawyers
Angela Clist
Christian Lambie
Salim Nathoo
Bank lending - lender side
Bank lending - company side
Bank lending - sponsor side
Allen & Overy
With its immensely strong bank side practice so often taking the limelight, the other aspects of A&O's practice can sometimes be overlooked, but the firm has strength on all sides and is increasingly being recognised as a growing borrower side practice as well. "It seems slightly anomalous to see Allen & Overy in tier two as opposed to tier one [in the borrower side table]," says one peer....
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With its immensely strong bank side practice so often taking the limelight, the other aspects of A&O's practice can sometimes be overlooked, but the firm has strength on all sides and is increasingly being recognised as a growing borrower side practice as well. "It seems slightly anomalous to see Allen & Overy in tier two as opposed to tier one [in the borrower side table]," says one peer. "It would be difficult to split them up on the company side, I think they have a similar % of the borrower side clients."
This is backed up by the firm's deal list this year, with the team working on a number of notable acquisition finance mandates. With private equity being the most active movers in the M&A area it is unsurprising that these mandates have emerged from the firm's clients in this area. In this sense one of the biggest deals saw Tim Polglase advise CVC Capital partners on the €665 million financing for the acquisition of Spanish healthcare supplier Capio Sanidad. CVC also called in the firm's lead partner Robin Harvey to advise it alongside Charterhouse to secure €785 million of debt facilities for the acquisition of Autobar in August 2010.
"They do a good job on a consistent basis, they are talented, pretty commercial, I think that if you subscribe to the view, which I do, that there is a magic circle I think they hold their own," says one client.
The firm's lender side practice of course remains strong, "I think you'd still say that Allen & Overy, Cliffords and Links are the three dominant ones the banking side," says one peer. A client adds: "A&O we have used on two projects because they do so many deals with the big banks. I'd definitely put them ahead of Clifford Chance."
A clear highlight were two linked transactions in the mining industry. In July 2010, Nick Clark advised Barclays Capital as facility agent of a $7.5 billion acquisition facility for the public and limited entities of BHP Billiton for its all cash offer for Petrohawk, with the loan consisting of a $5 billion term loan and a $2.5 billion revolving credit facility. Clark was again involved alongside David Murray as the team acted for the bookrunners including JPMorgan of a $45 billion loan to BHP Billiton for its bid for Potash.
The firm is not above criticism though and indeed several clients suggested that being one of the leaders in the field for so long has maybe made the firm too comfortable: "I would rank them one layer below Links, I think they are a bit complacent," says one. "They think that they are the best and they don't feel the need to prove themselves." Another provides a similar view suggesting that this has led to unnecessary delegation: "With Allen & Overy I get frustrated, its not partner driven, its the number of people you get on the deal. There's no continuity." Another agrees: "A&O, I don't think their partners are as available, they leave more junior people to run these transactions."
However, with the sheer numbers of deals being done, it is perhaps unrealistic to expect partners to be always present all the time. Another substantial mandate saw Michael Castle advise the joint bookrunners including BNP Paribas, Deutsche Bank and JPMorgan on a €4.3 billion credit facility for Bombardier. The novelty of the facility allowed Bombardier to increase its value or seal an extension with the existing bank syndicate or to bring in additional lenders.
The team also acted on the largest acquisition facility undertaken by an Indian corporate when Sanjeev Dhuna acted for Standard Chartered on the $10.7 billion financing to Bharti Airtel for its acquisition of Zain Africa.
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Leading lawyers
Trevor Borthwick
Sanjeev Dhuna
Mike Duncan
Robin Harvey
Stephen Kensell
George Link
Timothy Polglase
Financial services regulatory - non-contentious
Financial services regulatory -contentious
Allen & Overy
Allen & Overy's wider financial regulatory group is split between financial services, funds, M&A and derivatives and structured products.The firm benefits from its banking links and thus is often called in to provide regulatory advise to these key clients....
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Allen & Overy's wider financial regulatory group is split between financial services, funds, M&A and derivatives and structured products.
The firm benefits from its banking links and thus is often called in to provide regulatory advise to these key clients. However the feeling in the market remains that it is still some way behind the leading practices in both the contentious and non-contentious areas.
One key client is Co-Op Financial Services and last year Etay Katz acted on the establishment of dormant accounts reclaim funds. The deal involved negotiations with the British Bankers Association.
Linked to M&A, Katz also advised BNP Paribas on the regulatory aspects related to the integration of Fortis following the bank's acquisition of parts of its business in 2009.
On the contentious side Damian Carolan acted for the GLG Group in relation to litigation related to the holding of client money by Lehman Brothers International's European arm LBIE. The case revolved around how client money should be separated from house money, with the decision being referred to the Supreme Court.
Making use of the firm's strength and connections in the derivatives space, most notable the relationship with Isda (International Swaps & Derivatives Association) the firm continues to advise on various issues related to the regulatory changes within the derivatives space.
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Leading lawyers
Calum Burnett
Bob Penn
Allen & Overy
Some peers have suggested that Allen & Overy's growth of its corporate client base highlights a greater focus on this area as the firm tries to balance this with its traditionally strong finance offering. However this perceived growth is seen to have, if anything created some distance between it and its tier two contemporaries rather than necessarily bringing it closer to the market leaders....
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Some peers have suggested that Allen & Overy's growth of its corporate client base highlights a greater focus on this area as the firm tries to balance this with its traditionally strong finance offering. However this perceived growth is seen to have, if anything created some distance between it and its tier two contemporaries rather than necessarily bringing it closer to the market leaders. "The Allen & Overy machine has looked hungrier, leaner and slicker than the Clifford Chance machine," says one peer.
A headline grabbing deal saw the team acting for News Corporation on its proposed acquisition of BskyB. The offer was eventually withdrawn following the phone hacking scandal, which engulfed News Corps UK newspaper wing News International. As part of the proposed deal the team also oversaw the $400 million sale of the Bulgarian bTV Group to Central European Media Enterprises.
Another high profile mandate last year saw the team act for Dana Petroleum on the £1.8 billion hostile takeover by Korean National Oil Corporation (KNOC). Dana's main focus in terms of its asset base is in the North Sea and North Africa. The deal also included KNOC acquiring Dana's convertible bond portfolio.
Although ultimately unsuccessful, the team also advised TMX the controlling entity of the Toronto Stock Exchange on the merger with the LSE. The deal was eventually withdrawn after TMX felt it would be unable to secure shareholder approval.
Another substantial deal saw partners Richard Cranfield, Anna Buscall and Louise Wolfson advising Cable & Wireless on the $3.9 billion demerger into two new LSE listed entities.
Other highlights include advice to Eversholt Investment Group on the sale of its Rail Group to HSBC Asset Finance for £2.1 billion, acting for GLG on its $1.6 billion sale to the Man Group and the KBC Group on the acquisition of Global Convertible Bond and Asian Equity Derivatives from Daiva Capital Markets for £2.1 billion.
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Leading lawyers
Mark Gearing
Alan Paul
David Wootton
Private equity - fund formation
Private equity - transactions
Allen & Overy
"Good team, it would be difficult to chuck them out of tier one," says one partner and this is the consensus across the market.Finance of all forms is the firm's bread and butter and therefore it is no surprise to see it once again occupying the top tier....
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"Good team, it would be difficult to chuck them out of tier one," says one partner and this is the consensus across the market.
Finance of all forms is the firm's bread and butter and therefore it is no surprise to see it once again occupying the top tier.
Certainly one of the largest deals the team acted on last year and indicative of the firm's strength in the Middle East was its advice to Saudi Aramco Total Refining and Petrochemical Company (SATORP) as one of the sponsors on the Jubail Export refinery and Petrochemical Project in Saudi Arabia. The deal was valued at $12.8 billion with $9.6 billion being raised by the sponsors themselves.
Another substantial mandate on the domestic front saw the firm acting for the lenders, opposite Linklaters, with regard to the tenders of four UK offshore electricity transmission assets. Each project is being individually project financed and comes in the wake of a new regulatory regime surrounding offshore transmission assets.
Project bonds have been a growing area of the market in recent years as people look at new ways of financing project work. Last year, in conjunction with its Italian team, the firm acted for Andromeda as the borrower on Italy's first ever project bond for the financing of a solar plant. Andromeda entered into a construction contract with SunPower on the project.
Clients appreciate partner Conrad Anderson, in particular for his and the firm's links to the banks: "He has the confidence of the banks he gets them to speak with one voice," says one client. "He also understands what the important issues are, that's very important from our perspective. It's not just that he has the commercial sense and knows exactly what's required."
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Leading lawyers
Conrad Andersen
Anne Baldock
Allen & Overy
"The firms that are bank focused are always going to get a lot in from their large bank clients," says one peer and nowhere is this more true than at Allen & Overy who have simply been involved in nearly all of the largest bank related restructurings to have taken place since the financial crisis.There was no better example of this than the huge and convoluted proceedings surrounding the restructuring of Dubai World....
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"The firms that are bank focused are always going to get a lot in from their large bank clients," says one peer and nowhere is this more true than at Allen & Overy who have simply been involved in nearly all of the largest bank related restructurings to have taken place since the financial crisis.
There was no better example of this than the huge and convoluted proceedings surrounding the restructuring of Dubai World. This included four key proceedings in the Middle East: the $14.4 billion restructuring of Dubai World itself, the $10.4 billion restructuring of Nakheel, the $3 billion restructuring of Drydocks World and the $2.5 billion restructuring of Dubai International Capital. The A&O team led by Mark Sterling, Michael Duncan and Carolyn Conner led a 30 lawyer team to co-ordinate the creditor committees and negotiate with over 100 banks with interests in the various companies. The London team worked alongside counterparts in Hong Kong and Dubai itself on the deal, which represented the first sign that the global financial crisis had reached the Middle East.
Another notable and long-term mandate saw Katrina Buckley and Nicholas Clark acting for the lenders on the most recent £1.5 billion restructuring of telecommunications company Wind Hellas. This led on from the firm's advice on a previous restructuring in 2009. The most recent work included a pre-pack administration, a shift of the company's main operational focus (COMI shift) and, in a sign of a recent trend, an English scheme of arrangement. Partner Randal Weeks also acted separately for the security agent on enforcement issues.
The team also took on mandates arising from the Irish financial crisis. Earl Griffith and David Campbell advised the Quinn Group on the restructuring of the group's debts, which involved negotiations with Anglo Irish Bank and the financial regulator.
Again on the bank side, the firm also acted for the coordinators on the group restructuring of Cattles which involved restructuring various interlocking schemes of arrangement. Gordon Stewart, Trevor Borthwick and Michael Castle coordinated the deal whose most interesting feature was a new shareholder scheme, which would see the company acquired by an orphan entity.
Finally Ian Field and Marc Florent acted for Barclays as the security trustee on the restructuring of the European Directories Group. As well as acting in the general restructuring – which saw the companies debts moved to a holding company owned by the senior lenders – the team won a case in the court of appeal with Barclays arguing against a release provision included in the intercreditor agreement.
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Leading lawyers
Ian Field
Earl Griffith
Mark Sterling
Gordon Stewart
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