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

As the market begins to show positive signs across various practice areas, albeit at different levels, this optimistic outlook has a knock-on effect on the restructuring and insolvency sector, mainly as work atrophied as companies no longer had the need to resort to these measures.

On being asked what the big trends were in the market, one lawyer replies: "This is not an easy question as there hasn't been hardly any restructuring around."

"Around last summer we were tidying up the remaining restructurings and then we only have one other deal that has not quite reached the overwrite stage," adds another.

In a trend that arches over from the banking practice, it is more the case that people are coming back to the market to renegotiate deals they had before, to get better terms. One partner agrees: "The work at the moment is more refinancing then restructuring."

As one partner notes, any insolvency work too had really been done by the spring of 2010. However, analysis of this side of the practice has to be taken against the background that there is, essentially, not really an insolvency culture to speak of in the Russian market. This is a cultural thing really, as one partner explains: "Companies will almost always try and sit it out. For example, steel prices tumble and instead of restructuring or declaring, a certain steel company wanted to wait for prices to come back up instead! There is overall a general reluctance to come to the negotiation table."

This is one view, but other partners point to another reason why insolvency is not turned to in Russia. "There isn't a lot of insolvency, as no one trusts the processes," comments one, while another describes getting a decision in the courts as "a crapshoot"."People are loath to get in front of Russian courts. For small and medium things yes, maybe, but if there are big stakes they tend not to go to court," he explains.

Perhaps in response to this, firms do not have teams that focus specifically on Russia, but also the surrounding, ex-CIS (Commonwealth of Independent States) jurisdictions too. "There has been an awful lot of restructuring work still for us, but our team does not just work in Moscow but in the region too, in Kazakhstan and the Ukraine," says one partner on their firm's strategy in this area.

As noted previously, A&O was one of the quickest firms off the mark in adapting its banking and finance practice to be able to handle the large scale insolvency and restructuring work that the global crisis made prevalent. Making up the respected banking practitioner Elena Tchoubykina to partner was a deft move in maintaining this pre-eminent position, as the market confirms that A&O is still definitely one of the top firms around for this type of work. "I know A&O have done and continue to do some high profile work in this area," observes a peer.

The team maintains a number of outstanding deals that are still requiring work. Continuing a trend from last year, the firm has acted on a number of mandates in the aviation industry, including assisting GE Capital Aviation Services in relation to the bankruptcy of Aeroflot Cargo, taking the project from beginning to liquidation.

Partner Stephen Matthews, who is the head of the firm's banking practice in Russia, has also been active on restructurings. On one project he advised VTB Capital and VTB with regard to their exposures of high value acquisition finance loans based in the natural resources sector, and on another he acted for Credit Suisse on the restructuring of a residential mortgage loan deal.

Clifford Chance's year was characterised by a shift in its work that reflected the wider market. Beginning with debt restructurings the team there found themselves, by the end of the period, working mainly on refinancings.

"Clifford Chance is there in the top tier, where they should be," comments one partner, exemplifying the general consensus that the Magic Circle firm more than merits its top tier position once again this year.

Esteemed banking lawyers Victoria Bortkevicha and banking practice head Logan Wright have a specific expertise in this area and it is they who lead on the vast majority of the instructions the R&I practice receives.

The firm can also boast one of the most impressive deal lists of any firm this year, with a number of large mandates worked on. As well as being active on a large debt restructuring transaction in the Ukraine, Logan Wright led a team that advised on the refinancing of a pre-export credit facility provided by a syndicate of 14 banks including RBS, Deutsche Bank and ING, whom Clifford Chance acted for on the deal. It was extended to Evraz, a leading mining and steel company, who will use the funds to refinance its current syndicated facility. The deal, which closed in November 2010, completed for a value of $950 million.

Another good representative deal is the team's ongoing work with a confidential group of syndicates that require a restructuring, in terms of an amendment of terms, on four separate facilities extended to UC Rusal, the world's leading aluminium company. The facilities themselves tot up to a value of $5.35 billion and the work is being carried out within the terms of another restructuring that was done to deal with other debts the Rusal group had accrued. Victoria Bortkevicha has taken the lead on this, assisted by associate Adam Page.

Murat Akuyev, so active in M&A and markets work, further aggrandises his multi-practitioner credentials by being the go-to man at Cleary for R&I work in Russia too. As befits an international firm however, the practice is very much supported by its international network and in particular Daniel Braverman, Glen Scarcliffe, Simon Ovenden and Raj Panasar in London and Russell Pollack in Paris.

The firm is also keen to branch out, being active on all sides of deals in acting for creditors, investors and debtors alike as well as government work too.

The team's standout mandate is an ongoing case with UC Rusal, the foremost aluminium company in the world who have been engaged in a lot of debt restructuring and refinancing work this year. The team was led by Glen Scarcliffe, and with a total value of $16.8 billion the deal represents the largest restructuring of company with operations centred in Russia and Eastern Europe ever. The transaction is expected to go on for some time too.

While not being able to quite push at the top tier, Freshfields is generally acknowledged in this area to be a solid tier two firm that makes use of its contacts with natural resources and automotive groups to acquire work.

The main contact for the team at Freshfields is Mikhael Loktionov, whose banking and finance expertise sees him listed as a leading lawyer. He does not get involved too much in this practice area though, but has a dynamic team beneath him that has been very active this year.

A key deal saw a team led by London-based partner Duncan Kellaway advise the lead managers and joint bookrunners, Goldman Sachs, ING and VTB Capital, on a repurchase transaction through a tender offer of Evraz Group's Eurobonds. The deal was quite complex, with the aggregate principal amount of around $617 million already part of an outstanding issue made in 2008 of $1.3 billion 8.875% notes due 2013. In turn, the repurchase itself was financed by an $850 million issue of 6.75% coupon notes due 2018 offered from late April 2011. The deal, and all issues, was finalised in early May 2011.

A deal which Loktionov did get involved with was with a regular client Rolf Group, a leading Russian automotive dealer. Loktionov led a team advising on the prepayment of its indebtedness under the $150 million 13% guaranteed notes (due 2011) issued back in November 2009. This transaction completed just before Christmas 2010.

Alrud has been very active in this type of work over the past few years, making the most of its intimate local knowledge and contacts to garner a lot of mid-market work. This continued into 2010-11, with a number of mandates pushed its way.

On one, partner Alexander Zharskiy advised OJSC Pharmacy as it looked to avoid an occurrence of defaults brought on by related defaults of companies within its group. The default was successfully avoided with a restructuring of debt and equity facilities worth $110 million, with the finalising of the deal still being worked on.

Alrud's team is also currently representing a confidential eastern European bank with regard to the bankruptcy procedure of INCOM Auto, a mandate worth around $10 million that is still in the process of being completed.

Egorov Puginsky Afanasiev & Partners' strength is very much in the corporate area, and corporate head Dmitry Stepanov oversees the restructuring and insolvency team for the firm. As in other areas, the firm is ambitious, as one partner alludes to: "EPA&P do push themselves very hard."

As well as working on the corporate restructuring of Gazenergoprombank and OJSC Bank Rossiya, advising the latter in a deal worth almost $1.5 billion, a team led by Mikhail Kazantsev and Andrey Mashkovstev advised EN+ on the restructuring of a coal mine in the Republic of Tuva, in Russia, in line with the bankruptcy proceedings that the mine had to go through prior to its acquisition. This deal closed out fully in September 2010.

Pepeliaev Group constitutes its restructuring and insolvency team by combining elements of its corporate and dispute resolution and mediation practice. As it is, the team can boast joint leadership, with partners Vladimir Sokov, director for corporate sector development and Denis Bykov, Head of dispute resolution and mediation, heading the practice up. The firm has also seen burgeoning growth, hiring or promoting no fewer than a dozen associates this in 2011.

In terms of work, the team has had newer mandates but is most substantially engaged on ongoing work from the previous year. On one it is representing a confidential, leading international manufacturer of car parts as it restructures to allow its own re-entry into the market, as well as managing 13 insolvency projects for an undisclosed major Russian bank. Both of these are long-term projects that are expected to complete during 2011 at the earliest.

Vegas Lex has a reputation for expertise in corporate governance restructurings and rescues, though its main deal this year, overseen by department head Yuriy Bortnikov, came in a different area.

On this the firm acted for major commercial entity Bank Uralsib, restructuring its debts so that it could take a blocking stake in another firm to control it as a debtor. This deal closed successfully in December 2010. In addition to Bortnikov, the team acting on this included Maxim Grigoryev, the head of the Krasnodar office, and senior associate Anna Ovcharova.

Vegas Lex is also engaged on a number of other mandates that cannot be disclosed due to confidentiality.

Goltsblat has specific restructuring and insolvency teams, with corporate head Anton Sitnikov handling restructurings and corporate recovery and Elena Trusova dealing with insolvency work.

Trusova was active, in tandem with managing partner Andrey Goltsblat, as the firm continued to represent Airplane Engineering Bureau Sukhoi and Severstal in bankruptcy proceedings of Mezhprombank. This is a high profile bankruptcy case, which was still in the process of being worked out in mid-2011, with the two clients' claims coming to a cumulative value of RUB8 billion ($254 million).

Nektorov Saveliev & Partners shares much of its personnel with the corporate team, and as such Alexander Nektorov oversees this area.

Amongst its top work this year the team restructured Mosingzelenstroy through the creation of a new joint stock company. The company, which deals with Moscow plant and related areas, wished to do this to diversify its work and streamline its framework. The work completed in September 2010.

A bigger mandate saw the team reorganise another open joint stock entity, Uralkali. This is in context of the merging of the firm with Silvinit, another resource company, a move that has been held up by minority shareholder complaints. Once the $19 million transaction closes it will create Uralkali, one of the largest producers of potassium chloride in the world.