Legal Business

Olswang international telco head exits in set-back for LB100 firm

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CMS UK
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In its latest high-profile departure, Olswang‘s head of international telecommunications Purvi Parekh has exited the firm.

Mishcon De Reya-trained Parekh is noted in The Legal 500 for her telecoms experience, working on innovative projects including network sharing, mobile payments and EU single market telecoms regulation. She also has expertise on regulatory aspects of telecom work, and outsourcing and procurement.

She joined Olswang in 2009, having spent nearly 10 years as a partner and later head of telecoms at DLA Piper.

Olswang said partner Rob Bratby, who recently returned to the London office having led the firm’s Singapore operations for several years, has taken a global telecoms and emerging markets role for the firm.

Telecommunications is a major sector expertise for Olswang with lawyers working in the group across its offices in London, Brussels, Germany, Madrid and Paris.

Olswang’s IT and telecoms client base has included tech giants and major corporates such as Microsoft and Unilever. The firm has also represented Cable & Wireless, Virgin Media and Verizon in competition tribunals.

Parekh told Legal Business she has now started her own telcoms consultancy.

The latest departure from the firm comes after a series of high-profile exits from Olswang in the last eighteen months.

In January this year, former head of corporate, private equity and venture capital Stephen Rosen joined Cooley’s new London office, having confirmed his departure in March 2015.

In July last year, Greenberg Traurig launched its Germany office with the mass hire of a 50-strong lawyer team from Olswang in Berlin. Some 14 partners made the move in a team focusing on corporate, M&A, finance and technology, media and telecommunications.

In June last year the firm’s chief executive David Stewart surprisingly re-emerged at Caribbean law firm Griffiths & Partners in the Turks and Caicos.

Olswang has been involved in a number of merger talks over the past two years.  Former partners have told Legal Business the firm wants to improve its international footing, which has waned since the exit of the Berlin office.

Last month, it emerged the firm is in talks with CMS Cameron McKenna, while in 2012 it had been in discussions with US technology-focused firm Cooley.

An Olswang spokesperson added: ‘We can confirm that Purvi Parekh has left the partnership. We thank Purvi for her contributions, and we wish her well for the future.’

matthew.field@legalease.co.uk

 

Legal Business

Merger mania: Addleshaws and CMS discussed combination before entering current talks

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Legal mergers Addleshaw GoddardCMS UK
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Despite both firms now being in merger talks with other suitors, Legal Business understands CMS Cameron McKenna and Addleshaw Goddard considered merging with each other earlier this year.

Although discussions have since come to nothing, it is understood CMS Cameron McKenna approached Addleshaws for a possible tie-up.

CMS, the global brand of ten member firms, posted profits for 2015/16 of £735m, while Addleshaws saw a profit bump of 5% to pass the £200m mark this year.

Both firms have been repeatedly linked to mergers this year. CMS is currently understood to be in talks with Olswang in a move that would bolster its European IP and technology offering. The firm has had recent merger successes. Its combination with Scottish firm Dundas & Wilson in 2014 led to a boost in revenues of around 8.4%, expanding its energy and financial institutions sectors.

Addleshaws, which currently has four UK offices and a presence in Hong Kong, Singapore, Dubai, Oman and Qatar, has been clear about its goal to achieve £250m turnover by 2017/18. It posted fees of £201.8m for the 2015/16 financial year.

The firm was in talks to combine with Scots firm Maclay Murray & Spens, which were called off in March this year. Addleshaws is currently in discussions with Virginia-based law firm Hunton & Williams.

Both CMS and Addleshaws refused to comment.

This week Legal Business revealed that Addleshaws saw a significant uplift in its revenues with a bump of between £5-10m resulting from a settlement in the long-running Boris Berezovsky litigation.

matthew.field@legalease.co.uk

For the full story on Addleshaw Goddard under John Joyce, read: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

 

Legal Business

‘Expensive badge of legitimacy’: Olswang in firing line of BHS report

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Legal affairs CMS UKLinklaters
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Legal advisers on the sale of BHS have been labelled an ‘expensive badge of legitimacy’ in the report investigating the retail giant’s demise.

Olswang, which advised Retail Acquisitions on its purchase of BHS in 2015 ahead of its collapse in May this year, and Grant Thornton were criticised for their work on the deal by MPs in the findings of the BHS inquiry.

The report said while the firms cannot be blamed for Retail Acquisition’s decision to go ahead with the purchase from Sir Philip Green’s Arcadia Group, they were ‘increasingly aware of Retail Acquisition’s manifold weaknesses as purchasers of BHS. They were nonetheless content to take generous fees and lend both their names and reputations to the deal.’

However, the MPs in charge of the inquiry laid the blame on Green (pictured). Labour work and pensions committee chair Frank Field MP said: ‘One person, and one person alone is really responsible for the BHS disaster. While Green signposted blame to every known player, the final responsibility for up to 11,000 job losses and a gigantic pension fund hole is his.’

The role of legal advisers has been questioned throughout the inquiry, with Linklaters acting for Green’s Arcadia Group.

The report said that the role of the legal representatives was to advise, and not to add legitimacy to people ‘who would otherwise be bereft of credibility. The presence of reputable advisers does not absolve the client from exercising judgement.’

MP Ian Wright, chair of the business innovation and skills committee added: ‘It’s clear that a large cast of directors, advisers, and hangers-on enriched themselves off the back of BHS, including Dominic Chappell and his fellow [Retail Acquisitions] directors.’

However, despite the criticisms, the report’s authors said due diligence on the sale was ‘detailed and rigorous’ but the final report produced ahead of the sale failed to fully explain the risks involved, particularly regarding the pensions scheme.

In a letter at the time of the sale, Olswang’s lawyers concluded that a lack of pensions information had further increased the risk to Retail Acquisitions.

The report adds the advisers received significantly higher fees for the successful completion of the deal, and both were dependent on the deal’s success due to Retail Aquisition’s lack of resources to pay them in the event of its failure. Green said Grant Thornton and Olswang recieved £8m between them, although the two firms have not clarified the total fees. The report said the terms of engagement suggested Olswang and Grant Thorndon would receive £1.75m for the deal alone.

The authors note despite multiple problems with the proposed sale and the lack of financing available from Chappell, the deal ‘proceeded and with great haste’. It stated advisers were ‘doubly dependent’ on a successful transaction because Retail Acquisitions did not have the resources to pay them anotherwise.

The report said: ‘It is clear from email exchanges between Grant Thornton and Olswang that both were preoccupied with how their fees would be paid following the completion of the transaction.’

It added:  ‘The two main advisers to the transaction denied being in contact with Sir Philip’s team about their fees before the transaction. It is apparent, however, that Green found a way to ensure that advisers’ fees did not act as a barrier to the transaction proceeding.’

At the time of press Olswang and Linklaters had not responded to requests for comment.

Grant Thornton said in a statement: ‘We undertook our work in the belief that we could help BHS’ management team to turn the business around, and find a sustainable solution for the pensions scheme. It is regrettable that this hasn’t been possible, but we wouldn’t have been a part of that work if we didn’t believe we had experience of real value to share with BHS and its management.’

matthew.field@legalease.co.uk

Legal Business

Merger watch: Olswang finds a suitor in CMS Cameron McKenna

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Legal mergers CMS UK
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CMS Cameron McKenna and Olswang could combine to create a £880m firm as it’s understood the LB100 firms have entered into merger talks.

With new managing partner Stephen Millar at the helm, a tie-up will continue CMS’s continuing recent expansion with the firm focusing on its energy, life sciences and financial services sector strengths. The firm is in the second year of its merger with Scottish firm Dundas & Wilson.

The Dundas & Wilson merger has already proved fruitful for CMS, which this year saw a turnover increase of  8.4% to €1.01bn from €934.5.

While Olswang has not posted its 2015/16 results, last year revenue increased by 8% to £126.7m while profit per equity partner was steady at £490,000.

The firm is believed to have had talks with Bird & Bird and Osborne Clarke which have a similar sector focus, while Simmons & Simmons and Cooley have also been mooted as firms that have been on the radar.

Olswang has also historically has strong ties with both Cooley and Greenberg Traurig (GT). Olswang has worked closely with Cooley, but the US firm has recently strengthened its European offering by opening its London office last year diluting the close relationship. In a similar vein, Olswang held a formal alliance with GT for four years before the US firm opened its London office headed by former Mayer Brown partner Paul Maher in 2009 when ties weakened.

In his election manifesto CMS’s Millar promised to globalise the business, targeting expansion in the Middle East, Asia and North America. At the start of 2016 CMS Hasche Sigle announced an outpost in Tehran, making it the first international law firm to launch in Iran after sanctions were lifted on the nation.

madeleine.farman@legalease.co.uk

Legal Business

Blame on Brexit: Nabarro acts as Lowcosttravelgroup goes bust

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Commercial CMS UK
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Nabarro is advising on the administration of Lowcosttravelgroup as the travel agency business left thousands of holiday makers at risk of losing their summer getaways.

With the school holidays barely underway, customers of lowcostholidays.com and its partner travel sites may lose hotel rooms and flights that had not been paid for as the group ceased trading on 15 July.

Joint administrators Smith & Williamson and CMB Partners UK are being advised by Nabarro, with a team led by restructuring partner Glen Flannery and assisted by employment partner Tracy Marsden.

A statement from the administrators blamed uncertainty prior to the referendum and the more expensive Euro for the demise of the group, as well as the effect of terror threats on destinations such as Paris, Brussels, Egypt, Turkey and Tunisia.

Flannery (pictured) said: ‘The full effects of Brexit have yet to play out, but less than one month since the outcome, it is being cited as a contributing factor in some business failures, particularly in sectors sensitive to discretionary consumer spending and currency fluctuations. Travel is one of those sectors in which there may be more distress.’

Lowcosttravelgroup has a 500-strong workforce, with 120 at the company’s UK headquarters in Gatwick, and annual transaction values of around £500m. As many as 110,000 customers are currently booked to travel on holidays through the group.

The company, which also has offices in Spain, Switzerland and Poland, said the collapse followed ‘exhaustive attempts by the group’s directors to rescue the group, which were hampered by the recent and ongoing turbulent financial environment’.

The Nabarro restructuring team has led on several major administrations. Flannery advised foreign exchange broker LQD Markets in 2015 and on the second restructuring of UK Coal in 2013, which preserved 2,000 coal industry jobs.

In April this year, Weil Gotshal & Manges advised British department giant BHS on its administration, with DLA Piper working on behalf of administrators Duff & Phelps.

matthew.field@legalease.co.uk

Legal Business

‘Please explain’: Linklaters writes to Olswang to question BHS fees

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Arcadia Group adviser Linklaters has questioned Olswang on whether its client Retail Acquisitions Limited (RAL) broke its contract and breached covenants to pay the firm’s fees for the sale of BHS.

In a letter published by the Department of Work and Pensions select committee today (15 July), Linklaters asked Olswang partner David Roberts whether the firm’s clients had broken an obligation following the sale.

The committee has questioned partners from several LB100 firms as part of the ongoing inquiry into the sale of BHS to RAL by retail tycoon Philip Green’s Arcadia Group for £1 last year.

The question comes from the claim that Dominic Chappell’s RAL used £7.15m of funds from a sale of BHS’s main distribution centre to help pay off a loan to Allied Commercial Exporters (ACE) when it was meant to put it back into the business.

Linklaters asked whether ‘Olswang (and RAL) accept that the payment to ACE of approximately £7.15m in August 2015 raised by the sale of Atherstone warehouse … was in breach of RAL’s obligation clause’.

According to the letter, the clause asks that all proceeds raised by such a sale would be retained by BHS for the day to day running of the business.

Linklaters’ letter said: ‘Please explain Olswang’s involvement in relation to the ACE loan … and the August 2015 sale of the Atherstone warehouse.’

The letter, dated 23 June, also asks them to provide a response for the government select committee.

In a separate letter to the firm, dated 21 June, Linklaters asked Roberts if he was aware that the sale of BHS’s North West House property had been used to pay Olswang’s legal fees ‘in breach of the covenants in clause 6.2 of the BHS sale agreement and at Mr Roberts’ specific request’.

The firm said that both oral and written evidence given to the committee show that around £1.2m was paid by RAL to Olswang in fees. The sale of North West House raised £32m for BHS, but only £25m was ultimately received by the retailer.

The questions raised by Linklaters add to those of Green, who detailed the breach of covenant issue before the committee back in June.

Green told the joint committee: ‘The £7m never materialised. It only transpired at the end of this whole process that the £7m remained in the Olswang bank account.’

Olswang declined to comment and would not confirm if the firm had responded to the inquiries. Linklaters declined to comment.

matthew.field@legalease.co.uk

Legal Business

Under fire: Linklaters and Olswang in the spotlight as dealmakers face parliament over BHS collapse

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Legal affairs CMS UKLinklaters
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City lawyers faced the wrath of MPs during May and June in an inquiry over the sale of BHS. The April collapse of the retailer, following its sale by Sir Philip Green’s Arcadia Group for £1 to Dominic Chappell’s Retail Acquisitions, caused political fallout for advisers on the deal, including law firms.

Partners from Olswang, Linklaters, Eversheds and Nabarro all appeared before a joint committee of MPs from the Work and Pensions and the Business, Innovation and Skills departments.

Legal Business

Financials 2015/16: Nabarro latest to report slow growth with 3.5% revenue increase

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Nabarro has increased turnover by 3.5% to £130.4m, joining other mid-market firms with muted results for 2015/16. Last year the firm posted an 8% revenue rise to £126m, its biggest rise in more than a decade.

While preliminary figures show profit per equity partner (PEP) will be up by 1.7% to £586,000, the firm had posted a double-digit PEP rise this time last year.

Nabarro senior partner Ciaran Carvalho told Legal Business the firm had continued building on three years of major growth.

‘This is our fourth year of growth in a row and we have had some really significant growth in the last three years. This year in addition to continuing to grow we have invested quite significantly in promotions, with five internal promotions and ten lateral hires across our offices in the UK, Dubai and Singapore.’

Carvalho (pictured) said the firm had also made investments to plan for future challenges, having restructured its management functions by appointing Shiree Murdoch as chief operating officer in May and hiring Graeme Wood as director for change.

‘This is part of our change strategy to make sure we are at the leading edge and thinking hard about how we deliver legal services,’ said Carvalho.

The shake-up of management roles has also allowed Carvalho to keep a more client facing role, keeping him working in the market.

The year has seen Nabarro win new clients including BP and eBay, and places on major panels such as Land Securities.

The firm’s Manchester office, formed 18 months ago with a trio of Addleshaw Goddard real estate partners, has grown to 30 staff and has since acted on more than £1bn of corporate and property transactions.

Carvalho said: ‘We feel we’ve had a decent year, we’ve made some investments, we’ve set ourselves up for the future, and we’ve increased our profits.’

However, Carvalho noted there had been some slowdown in transactions as a result of the EU referendum and the Brexit result: ‘Some of our clients have chosen to take stock for now, but that’s by no means all clients, many in private equity and overseas investors have seen this as a great opportunity.’

While growth for Nabarro remains steady, it has fallen behind Watson Farley & Williams which reported revenue growth of 5%, up to £131.2m. Meanwhile, insurance specialist Kennedys announced a solid turnover boost of 7% earlier this month, up to £138.8m.

matthew.field@legalease.co.uk

 

Legal Business

BHS updated: Green claims Olswang ‘knee deep’ in deal, accuses firm of covenant breach

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Legal affairs CMS UK
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Former BHS owner Sir Phillip Green criticised Olswang and other advisers as he faced questions today (15 June) over the sale and contentious administration of the retailer.

Green’s Arcadia Group was advised by Linklaters when it sold BHS to Olswang client Retail Acquisitions for £1 back in 2015.

Today Green (pictured) gave evidence before the House of Commons Business, Innovation and Skills Committee and the Work and Pensions Committee as part of the ongoing inquiry into the sale to Retail Acquisitions which was owned by former racing car driver Dominic Chappell, who had been declared bankrupt at least twice.

During the hearing, Green said that experienced partners at Olswang and accountants Grant Thornton had helped give Chappell ‘credibility’ and were still ‘knee-deep’ in the deal days before the administration.

Green told the committee: ‘I took personally comfort from Grant Thornton and Olswang for representing this guy, as being reputable for being well-regarded firms.’

Green added that he took a ‘great deal of comfort’ that Olswang and Grant Thornton were representing Chappell, even though he suspected ‘they didn’t know the guy from a hole in the wall’ before the deal began.

During the hearing Green conceded that he shouldn’t have sold BHS to Chappell, but insisted that the advisers were to blame.

He also accused Olswang of holding £7m from the purchase of one BHS’s properties in a client account, which he claims breached covenants on that sale.

Green said for the sale of BHS asset North West House for £32m in 2015, only £25m turned up in the BHS accounts. Green said he was told the £7m had been transferred to the Bank of China to secure a £100m loan.

He added: ‘The £7m never materialised. It only transpired at the end of this whole process that the £7m remained in the Olswang bank account. Twenty-four to 48 hours after this covenant was signed £7m of the funds did not arrive in the cash flow.’

Green claimed £1.2m went to Olswang, £1.2m went to Grant Thornton, £1.8m went to Chappell, and several hundred thousand went to each of the gentlemen [Chappell’s advisers]’.

Late last month legal advisers on the transaction, including Linklaters corporate partner Owen Clay, and Olswang general counsel Stephen Hermer were questioned over their roles on the deal. Linklaters has complained about MPs questioning during the hearing in a letter which criticised committee leader Frank Field and defended its decision not to answer a question due to legal privilege.

Other law firms on the deal which were questioned by MPs for the inquiry included Nabarro, which advised Green’s firm Taveta Group on pension aspects and Eversheds which advised the trustees of the BHS pension scheme.

A spokeswoman for Grant Thornton said: ‘Grant Thornton’s only role in reference to the sale of BHS was to provide financial due diligence on BHS for Retail Acquisitions. At no point did we make representations to the client on whether BHS was a sensible investment decision or not, nor did we ever provide a reference for Chappell or anyone else involved with Retail Acquisitions.’

Olswang had not responded to a request for comment at press time.

victoria.young@legalease.co.uk

Legal Business

Olswang silent as inquiry reveals Linklaters billed £1.2m to Arcadia in BHS sale

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Legal affairs CMS UKLinklaters
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After MPs in the BHS inquiry called on the law firms involved to disclose further details of their dealings, Olswang has failed to provide details of its fees, while Linklaters and Nabarro have released what they billed.

The Work & Pensions Committee, along with the Business, Innovation and Skills, is jointly taking evidence on BHS as part of their inquiries into the Pension Protection Fund and the sale and acquisition of BHS.

MPs led by Labour MP Frank Field called on Olswang, which advised Retail Acquisitions in its takeover of BHS, to reveal its fees relating to the sale. The firm said it could not reveal details of payments due to client privilege.

In a letter to Field dated 3 June, Olswang said: ‘We are bound by professional obligations regarding legal professional privilege and client confidentiality, which have not been waived by our clients.’

The firm did, however, respond to other questions from the committee. Olswang said it was required to conduct customer due diligence checks under its legal obligations imposed by the Solicitors Regulation Authority. ‘As a result, if we identify monies from a source other than a client of their agent…we determine why the funds have come from an alternative source.’

However it said: ‘If we receive payment of our fees from a client, we are unable to trace where a client has obtained that money.’

Olswang was previously questioned on its due diligence over the sale of BHS to Retail Acquisitions. Retail Acquisitions director Dominic Chappell had previously been declared bankrupt twice prior to the purchase of BHS for £1 last year.

Other firms also responded with evidence that was released by the Work and Pensions Committee today (8 June).

Linklaters partner Owen Clay responded, detailing fees charged to Arcadia in relation to the sale of BHS and after, with Clay stating the firm had billed Arcadia £1.2m as of February 2016. The letter, which noted the firm has continued since that date, added the firm did not charge ‘success fees’.

Clay added: ‘We do not have in place any other forms of incentive arrangements.’

Nabarro partner Ian Greenstreet also responded to the committee’s call for evidence. Nabarro advised Sir Philip Green’s firm Taveta Group, charging £217,000 in relation to a rescue plan for the BHS pension scheme – dubbed ‘Project Thor’. The firm also billed a smaller amount for advice on the sale itself.

Eversheds partner Emma King, who advised the trustees of the BHS pension scheme, also provided evidence of when the firm first learned of the planned purchase of BHS.

Chappell has appeared before the committee of MPs today (8 June) to give evidence on his part in the sale. Chappell told the inquiry he was considering legal action against Sir Philip Green. He added: ‘I think Philip genuinely thought that we would fail. He sold it to us nevertheless.’

matthew.field@legalease.co.uk