IFLR 1000
The Guide to the World's Leading Financial Law Firms

The last twelve months have featured the most complex restructuring in Australian corporate history in the Alinta Energy deleveraging transaction, which took 18 months to complete and reached new levels of complexity. The restructuring transformed into a debt-for-equity swap agreement, with shareholders of the company voicing its displeasure with the move as it was seen to benefit the lenders more than the shareholders. According to a partner the company was in debt for a long period of time and "it was just too hard [for it] to escape from such a deadly embrace".

The impact of the credit crunch followed by the global financial crisis continued to play out in Australia over the last 12 months, driving significant activity in the restructuring and insolvency space.

The secondary market in distressed debt has continued to develop, with a greater focus on trading loans on specific deals rather than on a portfolio basis (and an upswing in credit fund and hedge fund involvement), and a significantly greater appetite of debt holders to trade out of positions they had held only 18 months ago.

Distressed corporate restructuring and pre-insolvency workouts, have also been on the rise, particularly in the property, retail and infrastructure space and those sectors affected by natural disasters.

In addition firms have been kept busy on complex restructuring of managed investment schemes (the regulated form of trust) following the collapse of those schemes. A greater number of agricultural and infrastructure schemes were affected during this period, such as the Rivercity Motorway Group Administration.

There were also a large number of regulatory actions by Australian Securities and Investments Commission (ASIC) and liquidators as a result of previous large corporate collapses such as Octaviar and ABC Learning Group.

In March 2012 Blake Dawson merged with Ashurst with the combined operation adopting the UK firm's name. Initially the merger will be focused on the two firm's Asia operations with full integration expected in 2014.

The firm's restructuring & insolvency team remains in tier one this year with peers highlighting the depth of the practice in terms of lawyers and knowledge. "I think their ability to find solutions using their vast technical knowledge and resources are what separates them and most competitors," comments a rival lawyer.

Head of the practice Ray Mainsbridge "is a particularly good operator that has great execution skills," comments a rival partner.

Ross McClymont and James Marshall are also highly regarded with the latter building a "great commercial reputation as one of the most experienced lawyers in administration process", commented a client. "He's on every deal and just technically very strong." Meanwhile McClymont "has always produced excellent work with the strong support base at Blake Dawson", comments another client.

Highlights in the past year include acting for Deloitte on all aspects of the administration of Octaviar and a number of its subsidiaries. The firm was assisting Deloitte in conducting extensive investigations and litigation and was asked to consider a range of options for the group's future.

Clayton Utz' restructuring and insolvency team advises on all aspects of reorganisation, voluntary administration, liquidation, receivership, asset tracing, corporate reconstruction, and bankruptcy. The firm also has the largest commercial litigation practice in Australia

The team is studded with "competent lawyers" says a client, who recommends David Cowling as "not only good but... one of the best in the business".

With the collapse of Trio Capital generating enormous concern on the part of investors and financial advisers given the A$300 million ($323 million) of superannuation funds which it managed, Clayton Utz's insolvency team advised and continues to advise the acting trustee on issues arising under corporations, superannuation and trustee legislation.

Another notable highlight saw the firm advise ABC Learning Centres, one of Australia's largest providers of childcare services with more than 1100 childcare centres and more than 16,000 employees in Australia, plus a further 1100 centres in New Zealand and the United States. The collapse of ABC affected a far broader cross section of society than the usual stake holders in a normal insolvency. Clayton Utz advised both the Commonwealth of Australia and its Court-appointed receivers in relation to the Commonwealth's high-profile rescue package for the ABC centres.

Being Australia's largest restructuring and insolvency group Henry Davis York (HDY) is recognised for "being attentive and proactive in their advice and approach to service", according to one client. The firm has an ability to bring a commercial focus to difficult situations, communicate effectively with its clients and to structure transactions innovatively with a results-driven outcome.

Another client praises the firm's depth: "What is particularly exceptional with HDY is that it is not only the partners that are exceptionally skilled, knowledgeable and trustworthy, there are many layers of staff below partnership level that are equally impressive."

Partner Scott Atkins was picked out specifically: "The most outstanding insolvency lawyer I have met, he is incredibly intelligent, articulate, commercial and above all an absolute delight," says one client.

In the last 12 months, HDY worked on two of the largest insolvency deals in Australia, ABC Learning Centres and Octaviar. The Octaviar Group comprised of over 400 companies with funds under management of A$5.2 billion ($5.6 billion) but went into liquidation with debts of A$2.4 billion.

ABC Learning Centres was notable mainly for its size as one of the largest and most complex receiverships in Australia's corporate history. The team played a role in transferring 262 centres to a new entity, ABC2, to which the Australian government had receivers appointed by the court. ABC2 in turn sold those businesses to other operators and the sale of ABC2 enabled ABC to restructure its operations with a view to returning its centres to profitability. After a period of trading, the majority of the ABC Australian business was sold to a special purpose vehicle (SPV) set up by a number of prominent charities.

Allens Arthur Robinson has "a good combination of commercial understanding and technical expertise in the area of insolvency advice," a client comments. The team has had another busy year with constant work handling some of the most complex matters.

One peer notes that: "Michael Quinlan a very highly rated individual. Very strong theoretically with excellent publishing in this area."

Last year the team advising the senior lenders for FreightLink who owns and operates the Adelaide to Darwin railway service for both commercial and industrial passengers. The project was a public to private partnership (PPP) involving the South Australian and Northern Territory governments with large syndicate of private funders including engineering companies and financial institutions.

The webs of contractual financing structure both debt and equity amongst the FreightLink entities financiers and owners was complex. It involved multiple levels of debt and concession agreements with governments. This meant that the FreightLink entities each had a considerable number of stakeholders, each with different approaches to the administration.

Another notable highlight saw the firm act for Alinta Financeon its debt restructuring, including a recapitalisation via the equity capital markets and a trade and asset sale. Following discussions with the syndicate of lenders, Alinta Finance and three of its subsidiaries, Alinta HoldCos proposed schemes of arrangement between themselves and their scheme creditors.

In March 2012 Mallesons Stephen Jaques merged with King & Wood to form King & Wood Mallesons, the first Sino-Australian firm. In the first phase the two firms will combine their Australian, Chinese and Hong Kong partnerships under a Swiss Verein structure. Full financial integration plans are yet to be announced.

Led by head of department Martin James, the restructuring and insolvency team at the firm has "a good depth of staff, matters we've worked on together, we've used their entire insolvency and corporate team, dealing with up to 20 people," says one client. Peers also praise the team: "They have a strong team at a number of levels, very good to work with." A client agrees: "I've found Mallesons have been very practical, commercial, and creative within the bounds of the legal regime that we operate in."

The firm were counsel to the Alinta Energy Group throughout its 18-month restructuring process. The team provided investigation of options for deleveraging the Group's business, which included running a triple track trade sale; IPO and debt-for-equity swap processes.

Furthermore the team constructed schemes of arrangement with creditors involving the listed trust as a means of returning funds to security holders and the restructuring of debt, equity and other commercial arrangements.

The deal is regarded by many as the most complex restructuring in Australian corporate history. The complexity of the arrangements included four creditors' schemes of arrangement with a total of 11 classes of creditors to implement a complex debt for equity arrangement for over 70 secured lenders.

In September 2010 the team also acted for both the secured creditors (comprising a large international banking syndicate at the senior and mezzanine level) and the receivers and managers of Windimurra Vanadium and Midwest Vanadium. The matter was a multi-layered restructure of equity, debt and recapitalisation across a 15-month period.

Minter Ellison is definitely "a leading firm with good specialist experience and we're happy we can use them whenever we can find the opportunity," says a client. Peers agree: "The team over at Minter Ellison has technically strong lawyers that is quietly effective and gets the job done." says one.

Melbourne based star partner Brendon Watkins, "is always focused on the best commercial outcome for us", says a client who also praises the firm's depth. "Brendan is well-supported by a talented team of senior associates and associates. I trust him to deliver the best outcome."

Sydney partner Michael Hughes is also praised: "A highly regarded reconstruction, insolvency and litigation lawyer with an Australia-wide first tier reputation," says one client. "An excellent communicator and provides very clear advice in complex matters."

Last year the team acted for a club of banks in relation to secured facilities provided to the Great Southern Group. In this complicated matter the team also acted for the receivers and managers appointed to eleven separate companies within the group. The sale of assets by receivers in 2011 was the largest private forestry sale by geographic area in Australia. Valued at over A$800 million ($862 million) this was also one of Australia's largest insolvencies in recent years.

Another notable highlight was the firm's work on the sale and receivership of Clive Peters. Acting for the receivers and managers on all aspects of the receivership the sale included thirty-two stores and six warehouses to Harvey Norman for an aggregate purchase price of about A$55 million. The sale was concluded within a tight timeframe of a week between commencement of negotiations and completion to achieve an excellent outcome for the receivers and managers.

Baker & McKenzie has been particularly busy in the restructuring arena. A satisfied client notes that "their global reach is a really unique and great feature in the Australian market. I think their ability to tap their global network is a real plus".

A notable highlight was advising KordaMentha as administrators on the day-to-day administration of Griffin Coal and five related entities. Griffin Coal is one of Australia's most significant coal mining operations, with several mines operating in the Collie Basin near Perth in Western Australia.

A client noted that Norton Rose's "intellectual commitment to problem solving is second to none" while another comments that "their advice is technically sound and always with a practical solution." The past year saw Norton Rose obtain orders in the Federal Court in June 2010 for recognition of the Japanese reorganisation of Japan Airlines in Australia under the Cross-Border Insolvency Act. This legislation had only been used twice in lower profile uncontested matters.

One satisfied client commends DibbsBarker for "possessing requisite knowledge to handle insolvency related issues."

The past year saw the team advising receivers in a group of companies who undertook a failed commercial shopping development in North Queensland. DibbsBarker provided assistance in informing the receivers their powers to amend non-commercial leases, contractual obligations on sale, prioritise disputes with other secured and unsecured creditors plus obtaining mareva orders to prevent the transfer of assets by directors overseas.

A client of Johnson Winter & Slattery notes that "the principal reason that I would recommend both the firm as well as David Proudman is that the work was all based upon commercial practicalities." The same client continues the team has "very hands on, commercial, pro-active and well-structured".

Acting for the Australian Securities and Investments Commission (ASIC) regarding the claims in compensation arising out of the Westpoint Group, four thousand investors suffered losses in excess of A$300 million ($323 million). ASIC commenced proceedings under legislative power in the name of Westpoint companies and on behalf of investors to seek compensation for the losses suffered. The team acted for ASIC in litigation commenced in the Federal Court of Australia and the Supreme Court of Victoria against the directors and auditors of the companies concerned.