Slaughters leads on Punch Taverns £2.4bn debt restructuring

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Longstanding Magic Circle client warns creditors that it could face administration

Slaughter and May is advising Punch Taverns on its £2.4bn securitised debt restructuring as the UK’s largest pub company warns creditors it could face administration.

On 10 June a powerful group of lenders rejected plans to reduce the pub group’s interest payments to £32m a year. Slaughters, led by corporate partner David Johnson is advising longstanding client Punch, which owns around 5,000 pubs across the UK.

Under the revised plans, Punch asked senior bondholders to approve a reduction in debt service payments of £600m over five years. However, a special committee set up by the Association of British Insurers to represent lenders rejected the plans last month, dismissing them as ‘vague’ and only a marginal improvement on proposals submitted in March.

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Landmark Prest v Petrodel Resources verdict reached

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Supreme Court decision hailed as end to ‘cheat’s charter’

The landmark divorce battle between Yasmin and Michael Prest came to an end last month as the Supreme Court on 12 June ruled Mr Prest should hand over properties held by companies under his control.

The ruling – the most significant divorce case to reach the UK’s highest court since the 2010 judgment in Radmacher v Granatino – has been touted as instrumental in establishing whether London remains a key forum for resolving big-money divorce cases. The case has also been watched for its impact on the court’s treatment of the corporate veil, which protects company assets.

The background to the long-running dispute – Prest v Petrodel Resources – is well trodden. In 2011, the High Court ruled that wealthy oil trader Mr Prest was worth at least £37.5m and should pay his ex-wife a £17.5m settlement. Included in that settlement was a £4m house in west London owned by one of Mr Prest’s companies, which Mr Justice Moylan ordered to be transferred in part payment of the settlement. However, last October Lord Justices Rimer and Patten allowed an appeal by the oil trader’s companies, ruling that on principle shareholders are not entitled to treat their companies’ assets as their own.

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Shell completes review of global legal panel

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Linklaters, Norton Rose and Baker & McKenzie win spots

Royal Dutch Shell concluded its extensive global panel review at the end of May with firms including Allen & Overy (A&O) and Baker & McKenzie marked out to receive work across multiple jurisdictions.

The tender, which kicked off in March, went out to 357 firms in 20 jurisdictions. According to legal director Peter Rees QC, the aim was to find between two and five suitable firms for each practice area in each jurisdiction. These firms would then be ‘pre-qualified’ for Shell legal work and would compete with each other for significant mandates.

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Withers and Speechly union off as SJP and KWM edge closer

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Merger talks between private client firms Withers and Speechly Bircham were called off at the end of May as both sides claimed the merger would not be in their best interests.

A joint statement from the firms said: ‘Following detailed discussions between the management and partnerships of Withers and Speechly Bircham, both sides have now concluded that a merger would not be in the best interests of both firms and have agreed not to pursue this further. The talks have enhanced the respect that both firms have for each other.’

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Redundancy announcements increase as top partners predict difficult H2 for UK firms

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Continuing pressure on UK legal market threatens largest redundancy levels since 2009

The level of legal redundancies this year is on course to be the largest since 2009 as the number of law firms announcing job cuts grows and senior partners predict tough months ahead.

CMS Cameron McKenna, which launched a review of its UK and Central and Eastern Europe business in January, last month took the final decision to make 37 staff redundant. The news came as 330-lawyer, top 50 UK firm Trowers & Hamlins also announced in late May that seven employees – three secretarial staff and four fee-earners – had been made redundant, with the firm blaming continuing pressures on the UK legal market.

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HSF merger throws up partnership issues as Herbert Smith issues cash call

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Global giant raises capital and shakes up corporate as HSF moves through merger integration

The merger between Herbert Smith and Freehills continues to give rise to growing pains as last month saw the UK half of the firm issue a multimillion pound cash call to its equity partners in preparation for financial integration.

The cash call was issued in a memo sent earlier this year to all equity partners. It is understood that they have been asked to contribute £2,000 per equity point. Herbert Smith’s lockstep ladder runs from 43 to 100, meaning those at the top of equity, around 65 individuals, are liable to pay around £200,000 each.

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Magic Circle unveils new pay levels

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Four of the five Magic Circle firms have now revealed their decisions on newly qualified (NQ) and trainee salaries, with decisions pending from the remainder of the top ten City firms.

Freshfields Bruckhaus Deringer so far tops the table for NQs, despite its decision to freeze pay for its career milestone foundation. Junior-banded associates – equivalent to NQ to one-year PQE – will earn between £65,000 and £72,500. The firm’s trainee pay has also been frozen at £39,000 for first-year trainees and £44,000 for second-year trainees.

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Ashurst takes lead role in headline deals

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Top 15 UK firm advises clients Commerzbank and Morrisons

Ashurst is leading on two headline transactions announced in mid-May as Germany’s Commerzbank entered talks to sell £4bn of its UK property loans and supermarket Morrisons signed a long-term deal with online grocer Ocado.

The top 15 UK law firm is advising longstanding client Commerzbank on the proposed sale of its Eurohypo UK operation to US bank Wells Fargo and private equity group Lone Star.

The work was awarded to Ashurst following a competitive pitch in November 2012. For Ashurst, which had an existing relationship with Commerzbank through its German operations, this will be the first corporate M&A deal it has advised Germany’s second-largest bank on, having undertaken largely finance mandates in the past.

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Cinven gifts Freshfields with IPO while HSF defends Severn Trent

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A handful of major corporate mandates were unveiled last month as private equity house Cinven kicked off its £1.4bn proposed initial public offering (IPO) of annuity provider Partnership Assurance Group and Severn Trent rejected a preliminary takeover offer by an international consortium.

Amid signs of renewed confidence in the IPO market, Cinven instructed Freshfields Bruckhaus Deringer – led by corporate partners Mark Austin and Adrian Maguire – to advise on the float of Partnership, which Cinven acquired for €200m in 2008.
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Birmingham’s Shakespeares becomes 72nd ABS of 2013

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Number of firms granted licences by SRA hits 2012 levels

The number of firms granted alternative business structure (ABS) status in 2013 has now hit the same level as for the whole of 2012, as Shakespeares became the latest mid-tier outfit to announce it has been granted a licence in mid-May.

Shakespeares was the 72nd firm to obtain a licence in 2013, the same number as obtained a licence in total in 2012 after the Solicitors Regulation Authority began accepting applications on 3 January. After a slow start, the first licences were granted in March 2012, when Co-operative Legal Services, Kent family practice Lawbridge Solicitors and Oxfordshire firm John Welch & Stammers became an ABS. 144 firms have now been granted ABS status.

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