Legal Business

Taking Manhattan: Freshfields continues New York expansion with Kirkland & Ellis hire

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Strategic recruitment Freshfields Bruckhaus DeringerKirkland & Ellis
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Magic Circle firm Freshfields Bruckhaus Deringer has bolstered its US offering again, this time enhancing its employment capability with the hire of Kirkland & Ellis partner Howard Klein in New York.

Klein will join the firm’s employment, pensions and benefits (EPB) practice group in the US with a view to serving both US based and international clients. He had been a partner at Kirkland & Ellis since 2008, having previously been at Proskauer Rose which he joined in 2006 from Dewey Ballantine.

Commenting on his appointment, Caroline Stroud, Freshfields’ global practice group leader for EPB, said: ‘Executive compensation and employee benefits are important factors in most complex transactions in the US and globally. Howard’s extensive expertise in both advisory and transactional benefits work will be a key element to further strengthen our world-class transactional capability.’

Adam Siegel, US regional managing partner added: ‘Thanks to Howard, we are now well-positioned to cover regular reporting, governance, compensation and other related boardroom matters as an integral part of our compelling cross-border transactional practice.’

Klein’s move is further evidence of the firm’s push to make ground in the city and build a strong US presence. In September the firm hired a trio of partners – senior partner Valerie Ford Jacob, and corporate partners Michael Lewitt and Paul Tropp – from Fried, Frank, Harris, Shriver & Jacobson’s New York office.

In the same month Shearman & Sterling’s Peter Lyons joined the firm as co-head of global public M&A while former Wachtell, Lipton, Rosen & Katz partner Mitchell Presser was brought in as US M&A head and former Skadden, Arps, Slate, Meagher & Flom partner, James Douglas, was became the firm’s Stateside leveraged finance chief.

kathryn.mccann@legalease.co.uk

Legal Business

Trainee retention: Freshfields keeps on 85% of spring 2015 qualifiers

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Freshfields Bruckhaus Deringer has become the first Magic Circle firm to post its trainee retention rate, with 85% taking up positions with the firm.

Out of a total of 48 trainees, the firm made offers to 44 qualifying trainees or 91%, of which 41 then accepted. The retention rate is above last year’s spring retention rate when Freshfields kept on 80% of junior lawyers totalling 35 out of 44.

The firm remains stuck around the 80% retention mark after keeping on 82% of qualifying trainees in in August last year. At that time, the firm made offers to 38 qualifying trainees out of the total August 2012 intake of 45, of which 37 lawyers accepted.

The firm once again did not disclose in which offices and practice areas the trainees would be qualifying.

Earlier this week Legal Business reported that White & Case kept on 100% of its trainees, while Osborne Clarke retained 89%, and Trowers & Hamlins retained slightly less with 82%.

Freshfields retention rates comes after its latest LLP filings with Companies House showed that staff costs at the firm fell from £554m to £548m despite an increase in salaries to £466m in 2014 from £449m in 2013.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Freshfields, A&O and Travers act as Asia’s richest man buys UK rail group for £2.5bn

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Corporate Allen & OveryFreshfields Bruckhaus DeringerTravers Smith
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Travers Smith, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) have won roles advising on the sale of UK’s leading rail leasing company Eversholt Rail Group for £2.5bn.

Asia’s richest man Li Ka-shing, owner of two investment vehicles Cheung Kong Infrastructure Holdings (CKI) and Cheung Kong Holdings (CKH), will purchase the rail group from its majority stake holder – a consortium that includes 3i Infrastructure, Morgan Stanley Infrastructure Partners and STAR Capital Partners – with a 50% share going to each vehicle. The deal has an equity value of around £1.1bn, giving an enterprise value of £2.5bn, and is expected to close in March 2015.

Travers Smith advised management on the sale of Eversholt Rail Group, which owns around 28% of the current UK passenger train fleet, led by corporate partner and head of private equity Paul Dolman, alongside tax partner Kathleen Russ.

Freshfields acted for the sellers with Richard Thexton leading the team alongside corporate partner Claire Wills. Partner Helen Lethaby provided tax support alongside partners Alastair Chapman on antitrust, competition and trade issues and David Pollard on pensions issues, while partner Simon Weller advised on the Hong Kong Listing Rules aspects.

Thexton said: ‘Following on from our role advising the selling consortium on the successful disposal of Porterbrook Rail in October 2014, this second deal in the sector in a short space of time clearly demonstrates our capabilities as the go-to firm for complex infrastructure M&A.’

The Porterbrook deal saw Freshfields act opposite Linklaters which advised the buyers – a group of investment funds including Alberta Investment Management Corporation, Allianz Capital Partners, EDF Invest and Hastings Funds Management.

A&O’s team consisted of a cross-border, cross-practice team of lawyers led by partners Richard Evans from London and Bernardine Lam from Hong Kong, for issues around corporate, regulatory and anti-trust.

jaishree.kalia@legalease.co.uk

Legal Business

Financials 2013/14: Freshfields’ profits continue to grow as headcount expands

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Financial results 2013/14 Freshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer has become the third Magic Circle firm to release its 2013/14 limited liability partnership (LLP) filings with Companies House, showing the firm’s profits increasing, ‘before the movement in the provision of partner annuities’, by 7% to £528m off the back of £1.28bn in revenues.

Staff costs at the firm fell from £554m to £548m despite an increase in salaries to £466m in 2014 from £449m in 2013. The rise in wages came as the firm increased fee earning headcount by 2.3% to 2,573 from 2,514 while maintaining secretarial and support numbers flat.

The average number of members at the firm grew by two to 334 in 2014, with the highest paid member, including payments relating to retirement, taking a 24% drop from £2.5m in 2013 to £1.9m.

Revenues at the firm grew slightly from £1.23bn last year in 2012/13 to £1.28bn, while total assets on the consolidated balance at Freshfields grew 7% from £896m to £961m, while loans and other debts due to members decreased 12% from £532m to £469m.

However, the firm’s cash on hand was down to £42.9m in its last financial year, from £55m in 2012/13. The net cash flow from operating activities also dropped 4%.

Profits for the year were distorted as the firm increased the rate it discounted future obligations to provide retirement annuities from 3.8% to 4.2%. The increased discounting meant that the provision made to pay for the annuities fell by £65m as of 30 April 2014.

However, the accounts record a 23.7% jump in operating profit from under £416m in 2012/13 to £514m while profit available for discretionary division amongst members which also peaked from £312m to £552m.

In the filings, the firm said: ‘Despite some continued global challenges, there is greater stability in many markets.’

jaishree.kalia@legalease.co.uk

Legal Business

An ‘exemplary’ presented case: Freshfields-advised Sotheby’s prevails against claim it mistook a Caravaggio for a copy

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Litigation Boodle HatfieldFreshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer has successfully had dismissed a multimillion pound lawsuit against auction house Sotheby’s concerning whether a painting of The Cardsharps was properly analysed and catalogued.

Lancelot William Thwaytes, who instructed Boodle Hatfield’s head of litigation Simon Fitzpatrick, claimed Sotheby’s ‘failed in its duty’ to advise on what some art experts now believe to be an original Caravaggio.

Thwaytes sued Sotheby’s, which instructed Freshfields Bruckhaus Deringer litigator Paul Lomas, alleging he was given negligent advice. The Cardsharps, the original of which is on display at Kimbell Art Museum in Texas, was catalogued as by a ‘follower’ of the Baroque master and sold by the auctioneer for a hammer price of £42,000.

The buyer was the wife of Caravaggio collector Sir Denis Mahon, who in November 2007 at his 97th birthday declared the painting a Caravaggio and insured it for £10m. Thwaytes claimed the auction house should have consulted with a wider range of scholars and undertaken x-rays.

However, Mrs Justice Rose, dismissed the case and noted: ‘They reasonably came to the view on the basis of what they saw that the quality of the Painting was not sufficiently high to indicate that it might be by Caravaggio.’

She added: ‘The painting probably would have made slightly more at auction or by private treaty if it had been sold with a catalogue entry detailing the positive and negative attributions of respectable scholars but not a great deal more.’

Boodle Hatfield instructed Henry Legge QC of 5 Stone Buildings. Lomas, who formerly led Freshfields’ global commercial disputes team, instructed Andrew Onslow QC of 3 Verulam Buildings. Rose concluded: ‘I wish to record my gratitude for the exemplary way in which this fascinating case was presented at trial by Mr Legge QC for Mr Thwaytes and Mr Onslow QC for Sotheby’s, and for the huge amount of work put into the preparation of the case by the legal teams and by the expert witnesses.’

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Kirkland, Travers, and Freshfields advise on Cinven’s £462m purchase of PCL

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Corporate Freshfields Bruckhaus DeringerKirkland & EllisTravers Smith
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Kirkland & Ellis, Travers Smith and Freshfields Bruckhaus Deringer have all won roles advising as private equity firm GTCR agrees to sell British financial services company Premium Credit Limited (PCL) to buyout group Cinven for £462m.

US firm Kirkland won the role acting for GTCR and the other sellers, with corporate partners Gavin Gordon and Stephen Ritchie leading the team alongside capital markets partner William Burke and tax partners Ian Taplin, Oliver Currall, William Welke and Mike Carew. 

Travers Smith senior partner Chris Hale and tax partner Russell Warren advised the company’s management while Freshfields’ corporate partner Adrian Maguire led the team representing Cinven.

The acquisition comes as Cinven builds a portfolio of specialty finance companies. ‘The acquisition of PCL is a further sign of increased activity of the key private equity players in the financial services sector,’ said Travers Smith in a statement. Kirkland’s Gordon added: ‘We were delighted to help GTCR on the complex acquisition and disposal of Premium Credit.’

The sale comes after Chicago-based GTCR brought PCL from MBNA Europe – a subsidiary of Bank of America Corporation – in 2012. The business has experienced a significant transformation since then including a establishing a standalone asset-backed funding facility with seven leading banks, and completing the carve-out from Bank of America.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Freshfields, CC and NRF called in on BT’s £12.5bn purchase of EE

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Corporate Clifford ChanceFreshfields Bruckhaus DeringerNorton Rose Fulbright
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Freshfields Bruckhaus Deringer, Clifford Chance and Norton Rose Fulbright have won roles as telecoms giant BT plumps to acquire Britain’s largest mobile network group EE for £12.5bn.

BT has entered exclusive agreements with EE owners Germany’s Deutsche Telekom and France’s Orange to purchase EE. The news comes after BT confirmed it was in talks to purchase either EE or Spanish group Telefonica’s O2 last month.

BT turned to Freshfields for advice with co-head of M&A in London Ben Spiers, head of antitrust, competition and trade Rod Carlton and corporate partner Natasha Good advising.

Meanwhile, Clifford Chance M&A corporate partners Tim Lewis and Joachim Fleury represented Deutsche Telecom, while Norton Rose Fulbright corporate partners Oliver Stacey and Chris Pearson advised Orange.

Under the agreement, Deutsche Telekom will hold a 12% stake in BT and be entitled to appoint one member to BT’s board of directors while Orange will gain a 4% share. The remainder of the £12.5bn purchase price will be paid in cash with financing options currently being considered by the company.

BT said in a statement: ‘The proposed acquisition would enable BT to accelerate its existing mobility strategy whereby customers will benefit from innovative, seamless services that combine the power of fibre broadband, wi-fi and 4G.’

If approved, BT will consolidate its back-offices and make savings on procurement, marketing and sales costs. BT also expects to generate revenue through selling fixed-line services to EE customers who do not currently take a service from BT, and by accelerating the sale of converged fixed-mobile services to BT’s existing consumer and business customers.

jaishree.kalia@legalease.co.uk

Legal Business

‘Unlawful’ guidance: Freshfields acts for Red Cross as CoA rules against exceptional funding advice

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The UK government has come under fire again over legal aid as the Court of Appeal (CoA) slammed how guidance for funding legal aid in immigration cases was unlawful.

The Master of the Rolls, Lord Justice Richards and Lord Justice Sullivan ruled yesterday (15 December) that the guidelines around legal aid funding in exceptional circumstances do not comply with the European Convention on Human Rights.

‘The guidance wrongly states that there is nothing in the current case law that would put the UK under a legal obligation to provide legal aid in immigration proceedings in order to meet its procedural obligations under article 8,’ said the judgement.

The director of legal aid casework refused six applications for exceptional case funding, which were introduced under the Legal Aid, Sentencing and Punishment of Offenders Act in April 2013. The six claimants were Teresa Gudanaviciene, IS (by his litigation friend, the Official Solicitor), Cleon Reis, B, Jacqueline Elizabeth Edgehill and LS. The British Red Cross Society acted as intervener advised by Freshfields Bruckhaus Deringer which instructed Guy Goodwin-Gill and Samantha Knights.

The defendants were the Director of Legal Aid Casework and the Lord Chancellor with the Tresury Solictor instructing Martin Chamberlain QC, Sarah Love and Malcolm Birdling.

Other firms picking up work include Turpin Miller which instructed Richard Drabble QC, Ranjiv Khubber and Joseph Markus to represent Gudanaviciene; and Public Law Project instructed Phillippa Kaufmann QC and Mr Chris Buttler to represent IS. Duncan Lewis & Co represented Reis instructing Richard Drabble QC, Tim Buley and Alistair Mills; Islington Law Centre acted for B, which instructed Paul Bowen QC and Alison Pickup; Duncan Lewis & Co acted for Edgehill alongside Ashley Underwood QC and Adam Tear; ATLEU represented LS alongside Paul Bowen QC and Catherine Meredith.

Earlier this month, a National Audit Office report into the legal aid reforms found that the ‘significant and quick’ cuts had not been put under proper consideration.

jaishree.kalia@legalease.co.uk

Legal Business

Management shuffles: Freshfields names new financial co-head as KWM appoints chiefs in Hong Kong

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Leadership Freshfields Bruckhaus DeringerKing & Wood Mallesons
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Freshfields Bruckhaus Deringer has made another change in management before the year ends, appointing head of the firm’s retail sector offering Claire Wills (pictured) as co-head of the firm’s financial institutions group (FIG).

London-based Wills will serve in her new role for four years with immediate effect, replacing banking partner Sean Pierce who will continue working on leveraged finance deals. She joins disputes partner Andy Hart, also in London, and corporate finance partner Christoph Gleske, who is based in Frankfurt, as co-head of the sector group.

‘We’ve [Freshfields] worked on more FIG deals by value than any other firm since the start of 2013 as well as representing key financial institutions on various industry investigations and highest profile cases around the globe,’ said Wills. ‘With the increasing breadth of our US FIG practice, our global offering to our clients in the FIG space will be even more convincing.’

Also making management changes is King & Wood Mallesons which has named Zhang Yi and Hayden Flinn as co-chief executives of its Hong Kong practice, while also making changes to its Hong Kong management team.

Yi and Flinn replace Stuart Fuller who covered the dual role of global managing partner of KWM and chief executive of the firm’s Hong Kong partnership since 2012.

As of the beginning of next year, Fuller will focus on leading the firm’s client and market strategy and work to align operations in a bid to become a top tier international law firm headquartered in Asia. Fuller will remain in Hong Kong and continue as global managing partner.

Yi and Flinn will be supported in their roles by practice leaders Richard Mazzochi (banking and finance) Paul Starr (dispute resolution) and Sheldon Tse (corporate and securities), Hong Kong chief operating officer Yvonne Murayama and Fuller as global managing partner.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: HSF, Debevoise, Weil, and Freshfields double down on Sky Bet sale

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Corporate Freshfields Bruckhaus DeringerHerbert Smith Freehills
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Herbert Smith Freehills (HSF) continues to cash in on its ever strengthening relationship with Sky as the digital giant goes through a major overhaul of its operations, this time advising on the company’s £800m sale of a stake in Sky Bet to private equity group CVC Capital Partners, which instructed Freshfields Bruckhaus Deringer.

Sky Bet, which was formed in 2001, has a strong partnership with Sky Sports and has built a large roster of TV, mobile and online gaming products, including Sky Poker and Sky Bingo. Sky Bet made £182m in revenue in the last financial year, but Sky were keen to offload the betting unit after securing takeovers of Sky Italia and Sky Deutschland for £7.4bn earlier this year.

HSF’s global head of M&A Stephen Wilkinson handled that European expansion and the London office again profited from Sky’s business overhaul, with London-based corporate partner Mark Bardell advising Sky on the sale of Sky Bet. Tax partner Howard Murray and TMT partner Amanda Hale supported Bardell on the sale. Goldman Sachs worked with Sky on the sale, advised by Weil Gotshal & Manges.

Private equity partner at Debevoise & Plimpton, David Innes, advised Sky Bet management on the deal while Richard Ward, London co-managing partner, advised on tax elements. Freshfields corporate partner Tim Wilmot advised CVC Capital Partners, with Andrew Craig providing IP advice.

tom.moore@legalease.co.uk