Legal Business

Board level appointment for incoming Tui general counsel

Posted on |
In-house Clifford Chance
legal-business-default

Leading European travel group Tui AG has become the latest major corporate to announce a board level legal appointment as former Clifford Chance (CC) lawyer and Demag Cranes head of legal Hilka Schneider joins as general counsel (GC).

Schneider, who in 2008 took over as head of the legal department at Demag and in 2011 saw the company through its $1.4bn hostile takeover by New York Stock Exchange-listed heavy equipment manufacturer Terex, will join the management board of TUI and will assume responsibility for group legal affairs, governance, risk and compliance.

German-headquartered Tui’s three business sectors are TUI Travel; TUI Hotels & Resorts; and Cruises, with its 2011/12 group turnover standing at €18.3bn.

As of mid-2014 Schneider, a corporate lawyer who started her legal career at CC in 2000 before joining DAX-listed Deutsche Post DHL in 2005, will also head the executive board office of the company.

Schneider’s appointment will take effect on 1 March 2014 but she joined the legal department of TUI in the New Year to ensure a ‘professional transition in the weeks ahead’, a company statement said yesterday (7 January).

Chairman of the TUI executive board, Friedrich Joussen said: ‘In her roles with Deutsche Post DHL and Demag Cranes, [Schneider] worked in other listed companies and brings extensive experience in transactions and the capital markets to us. It is important to me that the TUI management board has a good mixture of experienced TUI managers and managers who bring expertise from elsewhere. This enriches the company’s diversity and our ability to make decisions.’

Schneider takes over from retiring veteran Andreas Göhmann and Joussen added that he was ‘particularly grateful’ to the outgoing lawyer, ‘who has served for 16 years as head in-house counsel, providing significant support and contributions to the development of Preussag and TUI.’

Other recent high profile in-house moves have seen pharma giant Pfizer’s influential GC and executive leadership member Amy Schulman in December step down from her role just weeks before she was expected to assume a new role as head of vaccines, oncology and consumer healthcare business, while the former chairman of failed New York firm Dewey & LeBoeuf has secured a heavyweight role as legal advisor to the government of Ras al Khairmah, one of the seven emirates of the UAE.

sarah.downey@legalease.co.uk

Legal Business

CC formally launches ‘first-of-its-kind’ Saudi partnership but Riyadh remains a tough nut to crack

Posted on |
Middle East and Africa Clifford Chance
legal-business-default

Clifford Chance today (6 January) formally announced the launch of its joint Saudi and foreign-owned law firm in Riyadh, boasting an institutionalised career path for Saudi lawyers as it becomes the first international firm to establish an integrated partnership in the Kingdom.

The transactional lawyers of Al-Jadaan & Partners, Khalid Al-Abdulkareem and Abdulaziz Al-Abduljabbar, join Clifford Chance as partners to create a five-partner team alongside English lawyers Omar Rashid, Paul Latto and office head Tim Plews.

Clifford Chance has been in partnership with Al-Jadaan since 1998 and will maintain its co-operation with the firm, with managing partner Mohammed Al-Jadaan continuing as a special adviser to the Magic Circle firm.

The re-launched office, which opened its doors on 1 January, brings the total number of permanent Saudi and foreign lawyers to 30, with 20 support staff. Fifty percent of the lawyers in Riyadh are Saudi nationals.

The development, first announced in March last year, is said to be the next step in the evolution of the 3017-lawyer firm’s long term connection with Saudi Arabia and part of its broader strategy for ambitious growth across the Middle East and Africa, with the last three years seeing office launches in Doha, Casablanca and Istanbul.

In terms of building its local brand, the move has enabled the already top-tier practice to boast that this first-of-a-kind partnership reinforces Clifford Chance’s commitment to Saudi Arabia, creating new employment opportunities for Saudi nationals.

Mohammed Al-Jadaan, who together with partners Yousef Al-Jadaan and Abdullah Al-Hashim, will now focus on litigation, mediation, legal strategies and structuring related advice, said: ‘This development is great news for the Saudi legal market and its young talent who will now have the opportunity to train with and develop their careers in one of the world’s leading international firms, ensuring they benefit from an institutionalised career path. I am confident that the service offering of the team in Saudi will reach new heights now that it has the absolute commitment of Clifford Chance.’

Clifford Chance outgoing managing partner, David Childs added: ‘Ambitious domestic organisations, such as those we advise in Saudi, as well as our multinational clients want us to be able to provide this combination of deep local expertise and broad-reaching international experience.

‘I am therefore delighted that we are now operating a joint Saudi and international owned partnership and that we will be the first international firm to offer young Saudis the opportunity to develop their careers with us.’

As newer entrants continue to be tantalised by Saudi’s wealth and transactional opportunities Clifford Chance has ratcheted up an enviable corporate and finance deal book, including last year advising Almarai Company on its US$250 million bid to acquire Saudi Stock Exchange-listed Hail Agriculture Development Company – the first takeover bid for a listed company in Saudi.

But while Saudi’s legal market takes steps towards increased liberalisation – last week saw one of the first female law firms launched in Saudi by Bayan Mahmoud Al-Zahran, after regulation was relaxed last year enabling women to gain a license to practise –  international law firms continue to find Riyadh a tough market to crack, with Herbert Smith Freehills last April announcing that its exclusive association with Saudi Arabian firm Al-Ghazzawi Professional Association would come to an end in August.

Legal Business

Legal Business

LLP results 2012/13 – CC reveals drop in management committee pay as LG records further decline in turnover

Posted on |
Financial results 2012/13 Clifford ChanceGowling WLG
legal-business-default

Clifford Chance’s (CC’s) limited liability partnership accounts for the 2012/13 year have revealed a 5% drop in total remuneration paid to the firm’s management committee, according to the latest filings with Companies House.

Published on 23 December, the accounts show that the 16-strong management committee team received £18m this year, compared to £19m for the 2011/12 financial year.

Further figures from the report show that net assets attributable to members amounted to £219m; a decrease of £79m from the previous year, while net cash at the year-end stood at £103m, equating to a drop of £17m from the net cash figure as at 30 April 2012.

A geographical breakdown of firm revenue, which is recorded as £1,271m compared to £1,303m the previous year, illustrates that the firm’s UK offices netted the highest revenue, totalling £443m (unchanged since 2011/12) while its revenues in Continental Europe saw the greatest decline, down to £467m compared with £492m in 2011/12.

Revenue contributions from the Americas, Asia Pacific and the Middle East remained broadly static at £144m (£144m in 2012/11); £179m (£185m in 2011/12); and £38m (£39m in 2011/12) respectively.

Meanwhile, the average number of partners increased to 577 from 568, while the number of associates remained flat at 2,324.

The Magic Circle firm’s accounts further state that fees due from clients stand at £354m (compared with £330m in 2011/12) with £109m of those fees due to the UK offices, while less than 5% of billed revenue is attributable to a single client relationship.

The results comes as LLP accounts filed by Lawrence Graham, which recently secured a £170m tie-up with Midlands giant Wragge & Co to go live in May this year, show a greater drop in revenue for the 2012/13 financial year than previously reported.

Turnover fell 10% to £50.6m compared to £56m the previous year, while profit before members’ remuneration and profit shares decreased to £14.1m from £14.2m. In July, the firm posted a turnover drop of 8% to £51.8m and unveiled a 14% drop in profit per equity partner from £304,000 to £260,000.

Fees billed for the 2012/13 year also dropped to £50.2m compared to £54.2m in 2011/12, of which £49m is netted from the UK region.

sarah.downey@legalease.co.uk

Legal Business

Post Clifford Chance role for Childs as Financial Reporting Council announce his appointment as Chair

Posted on |
Regulatory Clifford Chance
legal-business-default

Clifford Chance (CC) outgoing managing partner David Childs has been appointed by the Financial Reporting Council (FRC) as chair of its conduct committee, taking over the role from Herbert Smith Freehills consultant Richard Fleck.

The FRC is the independent regulator for the accounting and actuarial profession and its conduct committee oversees the conduct division, responsible for the monitoring of recognised supervisory and qualifying bodies, audit quality reviews, corporate reporting reviews, and professional discipline.

Baroness Hogg, chairman of the FRC, said: ‘I am delighted that David Childs will become the new chair of the conduct committee. His experience of the legal issues facing corporate Britain will be invaluable to the vital work of the FRC as it continues to deploy the greater powers it has acquired since reform ever more effectively.’

Corporate lawyer Childs will officially stand down as CC’s managing partner in May, where he will be succeeded by incoming chief Matthew Layton for a four-year term.

On his upcoming role, Childs said: ‘A strong but fair regulatory approach is critical to fostering investment in the UK’s corporate sector. I look forward to supporting the FRC in its vital role ensuring high standards of professional behaviour are maintained.’

Announced in May, Baroness Hogg is herself due to step down as chairman of the FRC when a successor is appointed, having been in the role for three years. Her term formally ended in April however, she agreed to remain as chairman to allow the search for her successor to be properly conducted and the changeover ‘executed smoothly’, an FRC statement said.

sarah.downey@legalease.co.uk

Legal Business

Clifford Chance wins double pharma mandate as Merck buys AZ Electronic Materials and Amdipharm buys Acbur

Posted on |
Corporate Allen & OveryClifford Chance
legal-business-default

With the pharmaceutical industry driving a number of recent high value M&A deals, Clifford Chance has won mandates on two significant instructions in the sector, including advising AZ Electronic Materials on a £1.57bn cash offer by German pharma giant Merck.

The transaction was led by corporate partner Tim Lewis and includes antitrust partner Alex Nourry, Luxembourg corporate partner Pierre Gromnicki, employee benefits partner Sonia Gilbert and tax partner David Harkness.

Allen & Overy (A&O) advised Merck, with a team led by corporate partners Richard Browne and Michael Ulmer along with Luxembourg corporate head Mark Feider.

The deal will see AZ shareholders receive 403.5 pence in cash for each AZ share, which values the share capital of AZ, which is a global producer of high quality, high-purity specialty chemical materials for the electronics market, at approximately £1.57bn and suggests an enterprise value of around £1.75bn.

As AZ is incorporated in Luxembourg and listed on the London Stock Exchange (LSE), the offer is subject to the shared jurisdiction of the Takeover Panel in London and the Luxembourg regulator.

CC previously advised AZ on its £441m initial public offering in 2010, led by capital markets partners Adrian Cartwright and Iain Hunter.

Last week also saw CC announce its role advising Amdipharm Mercury on its $56m acquisition of Sweden-based specialty pharmaceutical company Abcur. Amdipharm is an international specialty pharmaceuticals group formed from the merger of Amdipharm and Mercury Pharma. Clifford Chance acted for private equity firm Cinven when it acquired Amdipharm and Mercury Pharma in 2012.

The CC team advising Amco in the Abcur acquisition was led by corporate partner Andre Duminy and Nordic firm Roschier advised on Swedish law aspects.

Abcur was advised by Swedish firm Lindahl with a team led by corporate partner Johan Karlefors, who specialises in employment life sciences and transport.

Other big pharma deals over the past two months include Novartis’ $1.68bn sale of its blood transfusion diagnostics unit to Barcelona-based Grifols, with A&O acting for Novartis and Proskauer Rose and Osborne Clarke’s Spanish arm for the buyer.

Statistics last month from Dealogic showed that pharma deals have dramatically outperformed the wider global M&A market.

david.stevenson@legalease.co.uk

Legal Business

Hefty fines: Cleary, Slaughters and CC advise on banks’ €1.7bn rate-rigging settlement

Posted on |
Competition Cleary Gottlieb Steen & HamiltonClifford ChanceSlaughter and May
legal-business-default

A collection of some of Europe’s strongest antitrust practices have been advising some of the world’s largest global banks as they today (4 December) agreed fines with the European Commission for their participation in illegal cartels to rig interest rates.

Cleary Gottlieb Steen & Hamilton, Slaughter and May and Clifford Chance were among the law firms advising a total of eight international financial institutions – including the Royal Bank of Scotland, Deutsche Bank, JPMorgan, and Citigroup – who have been fined a total of €1.7bn for their roles in the cartels.

Four of the institutions participated in a cartel relating to interest rate derivatives denominated in the euro currency while six participated in one or more bilateral cartels relating to interest rate derivatives denominated in Japanese yen. As is standard procedure for competition investigations, the companies’ fines were reduced by 10% for agreeing to settle.

Barclays, advised by Clifford Chance’s competition partners Elizabeth Morony and Oliver Bretz, escaped a fine in its entirety for revealing the existence of the euro cartel, avoiding a total pay-out of €690m for its participation in the infringement.

UBS, advised by Gibson Dunn & Crutcher‘s City disputes head Philip Rocher alongside Brussels-based David Wood, also received full immunity for revealing the existence of the cartels, avoiding an estimated fine of €2.5bn for its participation in five of the seven infringements.

Meanwhile, the Brussels-based Cleary team advising Citigroup, which received the lowest fine of £58m (€70m), was led by EU competition partner Robbert Snelders.

King & Wood Mallesons SJ Berwin‘s City-based partner Tom Usher was by instructed RBS as the firm advised the bank on its competition breaches leading to a £325m (€391m) settlement with the EC.

Elsewhere, Magic Circle firm Slaughter and May had competition litigation head Michael Rowe and head of disputes Deborah Finkler act for Deutsche Bank, which was levied the highest sanction out of all the banks worth £600m (£724m).

Pinsent Masons‘ senior competition partner Alan Davis advised broker RP Martin, which was fined £205,000.

According to the BBC, banks that have not yet settled fines but are being investigated include HSBC and Credit Agricole, as well as JPMorgan, which accepted a fine for rigging in one market but not another.

Speaking in relation to the settlement, the Commission’s vice-president in charge of competition policy Joaquín Almunia, said: ‘What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other. Today’s decision sends a clear message that the Commission is determined to fight and sanction these cartels in the financial sector. Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few.’

Sarah.downey@legalease.co.uk

Legal Business

Updated: Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

Posted on |
Litigation Clifford ChancePwC
legal-business-default

Clifford Chance is among the creditors of the European operations of Lehman Brothers set to receive a windfall after administrator PwC announced a total payout of $7.8bn, the latest in a series of payments made to creditors of the former US investment bank as it nears the end of its mammoth winding-up process.

According to one partner at the Magic Circle firm, the payment could be as much as £10m and a spokesperson for PwC said creditors are likely to receive payment before the end of the calendar year.

Lehman Brothers filed for Chapter 11 bankruptcy in September 2008, listing $639bn of assets against $613bn of outstanding debt but within days creditors filed claims of $1.2trn, double its assets.

PwC reached a settlement with Lehman Brothers International Europe (LBIE)’s former US parent company Lehman Brothers Inc (LBI) in June, paving the way for a return of assets held by the bank. With this latest round of payouts creditors are expected to receive all their money back plus, in some cases, interest.

Meanwhile, the legal fees in the LBIE administration for the six months to 14 September 2013 have reached £295m, with the total US and UK fees and expenses earned by lawyers and other professionals standing at $2bn since Lehman Brothers filed for bankruptcy, an indication of the scale of the task of unwinding the global financial institution’s affairs.

The most recent legal costs relate to advice given, as well as court proceedings and litigation conducted in numerous jurisdictions by a number of legal firms in connection with the LBIE administration.

It was Linklaters, advising alongside Davis Polk & Wardwell, that earlier this year won the settlement resolving all legal and factual issues between LBIE and LBI. Linklaters has advised PwC as administrator on English law matters since 2008. The Magic Circle firm has fielded a large team, including restructuring partners David Ereira, Tony Bugg and Richard Holden in London and litigation partner James Warnot in New York.

Other firms to land roles on the administration include Weil, Gotshal & Manges, New York-based Hughes Hubbard & Reed and legacy Norton Rose.

Clifford Chance declined to comment.

It is expected a number of other Lehman advisers will gain windfalls for written-off fees.

Update: Over 30 other law firms have been named as creditors set to receive a windfall of the European operations of Lehman Brothers in a list published by PwC on 5 December.

The firms owed money by Lehman Brothers International Europe (LBIE) are confirmed as trade creditors in a 300-strong list. In addition to Clifford Chance, fellow Magic Circle firms Allen & Overy, Linklaters, Slaughter and May, and Freshfields Bruckhaus Deringer are due to be reimbursed.

Other firms listed includes Dublin-based firms A&L Goodbody, McCann FitzGerald and Dillon Eustace; and US firms McDermott Will & Emery, Skadden, Arps Slate, Meagher & Flom, and Weil, Gotshal & Manges. The now-defunct Dewey & LeBoeuf is also named as a recipient.

sarah.downey@legalease.co.uk

Legal Business

Clifford Chance in line for windfall payment after PwC reaches European Lehman settlement

Posted on |
Litigation Clifford ChancePwC
legal-business-default

As latest payout confirmed to Lehman’s creditors, total US and UK costs soar to $2bn

Clifford Chance is among the creditors of the European operations of Lehman Brothers set to receive a windfall after administrator PwC announced a total payout of $7.8bn, the latest in a series of payments made to creditors of the former US investment bank as it nears the end of its mammoth winding-up process.

According to one partner at the Magic Circle firm, the payment could be as much as £10m and a spokesperson for PwC said creditors are likely to receive payment before the end of the calendar year.

Lehman Brothers filed for Chapter 11 bankruptcy in September 2008, listing $639bn of assets against $613bn of outstanding debt but within days creditors filed claims of $1.2trn, double its assets.

Legal Business

Clifford Chance global managing partner vote: Layton takes the crown

Posted on |
Leadership Clifford Chance
legal-business-default

The long-awaited decision over who will replace David Childs as Clifford Chance’s global managing partner (MP) has been announced, with the partnership electing global head of corporate Matthew Layton to take over the top management role after voting closed yesterday evening (27 November).

Layton (pictured above with Childs) was widely cited in the early stages of the election process as favourite to lead the 3,017-lawyer Magic Circle firm, with challengers emerging as Paris-based office managing partner and M&A lawyer Yves Wehrli; global head of tax, pensions and employment David Harkness; and City-based banking and finance partner Andrew Carnegie.

One of the four global MP candidates needed to secure at least 50% of the vote yesterday. If not, a second round of voting would have taken place between the top two candidates, and a result would not have come out until next month.

The sounding process for nominations opened in October, while the shortlist of candidates was confirmed to the partnership this month. While existing and ex-partners have said there was no one obvious successor to take over Child’s mantle, Layton’s position appeared to strengthen as the election process wore on.

Layton said on the news of his election: ‘Clifford Chance enjoys an enviable position, entrusted with the best and most challenging work for many of the world’s most successful and forward-looking organisations. The evolution of global markets is creating new opportunities and risks for our clients. For these organisations, Clifford Chance’s well-established ‘one firm’ approach that combines expertise and deep experience across sectors, practices and geographies around the world is of huge value. I am greatly looking forward to working with my fellow partners and colleagues as we continue to build on our position at the forefront of the global legal elite.’

Layton will take over the four-year term on 1 May 2014 from Childs, who himself took over as managing partner on 1 May 2006.

Childs added: ‘I feel very proud and honoured to have had the opportunity to serve as the managing partner of Clifford Chance. I am confident that in passing the baton on to Matthew I leave the firm in very good hands. I know that Matthew is as ambitious for the firm as I have been, and I’m sure Clifford Chance will go from strength to strength under his leadership.’

The global MP election follows a run of senior appointments, including finance partner David Bickerton, who was elected to serve a further four-year term as London managing partner in an uncontested election.

Bickerton’s election followed the appointment of banking and finance partner Simon Sinclair as London capital markets head, succeeding securitisation partner Andrew Forryan, as current London tax, pensions and employment (TPE) chief Chris Davies was simultaneously elected to replace David Harkness as global TPE head.

In October, high profile litigator Jeremy Sandelson – who early in the global MP election process was tipped as a possible contender for the role – was re-appointed as global head of the litigation and dispute resolution practice for a second term in an uncontested election.

sarah.downey@legalease.co.uk

Legal Business

Investigations: RBS appoints panel firm Clifford Chance to conduct independent review

Posted on |
In-house Clifford ChanceLinklatersThe Royal Bank of Scotland
legal-business-default

Investigations have become big business for the City’s thriving litigation teams although the majority of them happen behind closed doors for valued clients and are not said to offer an ‘independent’ assessment.

A recent exception is the Royal Bank of Scotland’s (RBS) disclosure yesterday (25 November) that it has appointed Clifford Chance (CC) to conduct an independent inquiry into the treatment received by small business customers in financial distress, after allegations that the bank deliberately drove them to collapse for its own gain.

While large City firms are undoubtedly sophisticated providers of complex legal services their close relationship with many of the large banks and financial institutions at the very least raises questions over their ability to give a truly independent viewpoint.

Despite bank panels shrinking over recent years it is still common for them to include a number of the Magic Circle and larger firms, with RBS 21-strong legal roster, unveiled in July, including CC, Allen & Overy, Freshfields Bruckhaus Deringer and Linklaters as well as many of the larger City and transatlantic firms such as Eversheds, Hogan Lovells and Norton Rose Fulbright.

CC itself is on the panel for Europe, the Middle East and Asia, with a mandate to act in most of the jurisdictions where it has offices.

However, when asked to discuss how the inquiry will work given the Magic Circle client’s existing relationship with the bank, a spokesperson declined to comment.

CC’s instruction by RBS comes after independent reports from both the former Bank of England deputy governor Sir Andrew Large and government adviser Lawrence Tomlinson raised concerns over the bank’s treatment of struggling small businesses, with the report by Tomlinson accusing the bank of pushing small firms into its turnaround unit, the Global Restructuring Group (GRG), so it could charge higher fees and take control of their assets.

In a letter published on RBS’ website, group chief executive Ross McEwan noted that changes had already been put in place but added: ‘to ensure our customers can have full confidence in our commitment to them I have asked the law firm, Clifford Chance, to conduct an inquiry into this matter, reporting back to me in the new year.’

On a more general level, City law firms’ investigations practices are highly developed and their ability to provide detailed evidentiary analysis, often alongside accountants, is increasingly being used to show seriousness of intent.

Only recently, fellow Magic Circle firm Linklaters, alongside accountants PwC, entered into an ongoing independent review of client private securities company G4S, following allegations that employees engaged in false billing practices between 2005 and 2013.

As G4S attempts to rebuild its brand the company asked Linklaters to assess whether there was evidence of dishonesty or criminal conduct by employees who billed the Ministry of Justice as part of an electronic monitoring contract.

The firm is also advising G4S in relation to a Serious Fraud Office (SFO) probe on the same matter.

francesca.fanshawe@legalease.co.uk