Legal Business

HSF claims victory as judge rules White & Case partners free to join

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Litigation White & Case

An Australian Supreme Court judge has ruled that the eight partners who quit Herbert Smith Freehills (HSF) in September 2016 to join White & Case will be able to join immediately, but are prohibited from soliciting their former client bases.

Justice Robert McDougall of the New South Wales Supreme Court found that until a permanent order was made, certain clauses within HSF’s partnership deed which forbid the partners from joining White & Case were unreasonable. Namely, provisions which disallowed the former partners from practising within ‘restricted areas’ surrounding HSF’s offices and joining a ‘specified competitor’ within six months of resignation. However, the judge upheld HSF’s contention that the exiting partners should be barred from contacting their previous clients.

As a result, Legal Business understands the partners will be immediately joining White & Case’s Australian offices in Melbourne and Sydney. The former partners will be able to practise at White & Case, but not in a partner capacity and without accessing their former client bases for six months. After the ‘restricted period’ is over, the former HSF team will be able to become White & Case partners.

The case was pursued by 167 current HSF partners, led by commercial litigation partner Michael Pryse. The eight defendants were former Melbourne partners Andrew Clark, Brendan Quinn, Alan Rosengarten, Josh Sgro, Tim Power, Jared Muller and Joanne Draper, alongside Joel Rennie from the Sydney office. Seyfarth Shaw partner Chris Gardner represented the former HSF partners.

Court documents revealed that the decision to classify White & Case as a ‘specified competitor’ was taken by the HSF Australia board on 31 August 2016, one day before the eight partners resigned en masse within half an hour of each other.

HSF had argued that the location clauses were reasonable because outgoing partners ‘may, post-retirement, tend to be able to maintain a higher level of connection with HSF’s clients…in closer proximity to his or her former office’ and ‘restraints against working in competition within a restricted area are difficult for HSF Australia and/or the Global LLP to police.’

A White & Case spokesperson said: ‘We’re glad that these individuals will join White & Case in the near future as we continue to grow our Australia practice.

‘The firm’s Melbourne office has been active since 1 December 2016 and will continue to operate as normal. The Sydney office will open very shortly and it, too, will be fully operational upon its opening.’

A HSF statement read: ‘This is a successful outcome for Herbert Smith Freehills.

‘These proceedings had the objectives of protecting the firm’s interests, including protecting our valued relationships with clients.

‘Today’s decision prevents the departing partners from joining White & Case as partners, and from soliciting our clients for a six-month period.

‘We’re happy with this outcome.’

A direction hearing tomorrow will determine the date of a future trial to make a permanent decision.

White & Case’s move last year to hire the project finance team from HSF was considered one of the largest legal moves ever in the Asian market. A senior White & Case partner indicated the team controls around £30m of business.

tom.baker@legalease.co.uk

Read more: ‘Court documents revealed: Inside HSF’s battle with White & Case bound partners as judgment looms‘

Legal Business

Court documents revealed: Inside HSF’s battle with White & Case bound partners as judgment looms

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Litigation Herbert Smith FreehillsWhite & Case

As judgment is expected tomorrow in a court battle between a group of Herbert Smith Freehills (HSF) partners and their former colleagues who quit for White & Case, the documents from case reveal how the group quit, and what HSF wants to do to restrain them.

A group of 167 HSF partners took action in mid-February against eight former partners who resigned from HSF to join White & Case, including key project finance partner Brendan Quinn. The case has been heard in the New South Wales Supreme Court before Justice Robert McDougall this week, with HSF wanting to stop the White & Case partners from joining on their planned start day – tomorrow (2 March) and instead have them join on 1 September this year. At issue is whether certain clauses in HSF’s partnership deed are enforceable.

HSF claims the partners co-ordinated their exits, citing emails from Quinn to White & Case partners, and a Legal Business article where the hires are first revealed.

HSF suggests Quinn had been preparing the exits as early as September 2015 this year, as evidenced by emails between Quinn and senior management at the US firm. Quinn had also sent an email to his personal email account recording an agenda with the following items ‘update on vote, update on offer letters, staff, accommodation,’ and with the closing item ‘when do we pull the pin.’

According to the documents, the board of HSF Australia amended the firm’s partnership deed to make White & Case a ‘specified competitor’ on 31 August 2016, the day before the eight partners resigned. According to the deed, former HSF partners can’t work for ‘specified competitors’ for six months after they resign.

On 1 September, the partners resigned within five minutes of each other, except Jared Muller, who quit about half an hour later.

HSF is also trying to restrict White & Case partners from working in particular areas, with maps annexed to the documents indicating restricted zones where HSF believes the partners should not work.

HSF argues that the location clauses are reasonable because outgoing partners ‘may, post-retirement, tend to be able to maintain a higher level of connection with HSF’s clients…in closer proximity to his or her former HSF Australia office’ and ‘restraints against working in competition within a restricted area are difficult for HSF Australia and/or the Global LLP to police.’

In a December 2016 letter addressed to the HSF Board, Seyfarth Shaw, the law firm representing the eight former partners, said the defendants did not regard these clauses because ‘they do not protect any legitimate business interest of Herbert Smith Freehills.’

HSF partners are being represented by Michael Pryse, while the White & Case partners are being advised by Seyfarth Shaw partner Chris Gardner. A mediation scheduled for 13 February failed.

White & Case’s move late last year to hire the 10-partner project finance team from HSF was one of the largest legal moves ever in the Asian market. A senior partner at White & Case has indicated that the team controls around £30m of business, while HSF put the figure at around £20m when calculated using an average of the team’s billings over three years.

Legacy Herbert Smith had some of the toughest exit terms in the City which led to a stand-off when property partner Chris de Pury quit for Berwin Leighton Paisner. Herbert Smith had threatened to enforce a 12 month convenant on top of a year’s notice.

However the firm’s merger agreement with Freehills overhauled the terms, cutting the notice period from 12 months to six, making it easier for partners to quit at a vulnerable moment.

tom.baker@legalease.co.uk

Legal Business

Making history: HSF, White & Case and Pinsents advise on the first new UK clearing bank in 250 years

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Finance Herbert Smith FreehillsWhite & Case

Herbert Smith Freehills (HSF), White & Case and Pinsent Masons have picked up mandates advising on the establishment of the first new clearing bank to be approved on the UK market in 250 years.

ClearBank was announced yesterday (28 February), and will start operating in autumn 2017 as the fifth clearing bank in the UK alongside Barclays, HSBC, Lloyds and Royal Bank of Scotland.

The bank will provide building societies, credit unions, other banks and fintech companies with access to all the major payment and card schemes, including faster payments which will allow people to send and receive money instantly online or through mobile. The bank is founded by Worldpay founder Nick Ogden, who will serve as chairman.

The HSF team was led by London corporate partner Greg Mulley and financial services regulatory partner Andrew Procter, alongside corporate partner Caroline Rae, incentives partner Mark Ife and TMT and outsourcing partner Nick Pantlin.

White & Case acted for one of the investors, PPF Investments, with relationship partner Jan Andrusko based in Prague, as well as corporate partner Gavin Weir, global head of employment Nicholas Greenacre and financial regulation partner Stuart Willey. Pinsents acted for CFFI Ventures, with a team led by corporate partner Tom Leman.

Mulley (pictured) said: ‘This is very significant and positive for competition especially given £82trn of payments are processed through the UK financial system every year and there are only four other clearing banks.’

HSF has acted on similar fintech matters including UK authorised Tandem Bank, on the investment by Sanpower Group through its UK subsidiary House of Fraser. Other mandates acting for Worldpay in respect of providing internet payment solutions to merchants and card processing services, and in relation to its separation from RBS in the UK and Europe.

White & Case has advised the PPF Group in the past on the €2.5bn sale to Generali in 2013 of its remaining 49% stake in Generali-PPF, its joint venture with the Italian insurer.

georgiana.tudor@legalease.co.uk

Legal Business

Taking action: HSF sues partners who quit to launch White & Case in Australia

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Litigation Herbert Smith FreehillsWhite & Case

Herbert Smith Freehills (HSF) is suing eight partners who quit to join White & Case, filing a lawsuit at the Supreme Court of New South Wales last week.

Led by Melbourne litigation partner Michael Pryse, a group of 167 HSF partners are bringing claims against former Melbourne partners Andrew Clark, Brendan Quinn, Alan Rosengarten, Josh Sgro, Tim Power, Jared Muller and Joanne Draper, alongside Joel Rennie from the Sydney office.

Hong Kong partner Fergus Smith and Singapore partner Matthew Osborne are not named as defendants in the case despite also joining White & Case. Associates Adeline Pang and Ged Cochrane and special counsel Michelle Keen are also excluded from the suit despite already working at White & Case as partners. The first hearing of the case is scheduled for 27 February.

White & Case’s move late last year to hire the 10-partner project finance team from HSF was one of the largest legal moves ever in the Asian market. A senior partner at White & Case has indicated that the team controls around £30m of business, while HSF put the figure at around £20m when calculated using an average of the team’s billings over three years.

According to local media, the partners are subject to a six-month notice period after resignation, and a further six-month period which prohibits them from practising at a rival firm as a partner. This means that the partners would not be able to practice until September 2017.

Legacy Herbert Smith had some of the toughest exit terms in the City which led to a stand-off when property partner Chris de Pury quit for Berwin Leighton Paisner. Herbert Smith had threatened to enforce a 12 month convenant on top of a year’s notice.

However the firm’s merger agreement with Freehills overhauled the terms, cutting the notice period from 12 months to six, making it easier for partners to quit at a vulnerable moment.

A White & Case spokesperson said: ‘Although we’re not party to this litigation, we are hopeful for a speedy resolution.’

HSF declined to comment.

tom.baker@legalease.co.uk

Read more on the firm in: ‘Taking over – one leader at HSF but is the culture clash over?‘

Legal Business

White & Case and SullCrom advise as Deutsche Bank fined over £500m for money laundering claims

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Regulatory Deutsche BankSullivan & CromwellWhite & Case

White & Case and Sullivan & Cromwell have advised Deutsche Bank as Germany’s largest lender has been fined £500m by the Financial Conduct Authority (FCA) and the New York’s Department of Financial Services over money laundering claims.

UK financial watchdog fined Deutsche Bank £163m for failing to maintain an adequate anti-money laundering (AML) control framework between 2012 and 2015. It is the largest financial penalty for AML controls failings ever imposed by the FCA.

The fine was issued after an FCA investigation into allegations the bank was used by unidentified customers to transfer $10bn out of Russia ‘in a manner that is highly suggestive of financial crime’. Deutsche Bank turned to White & Case dispute resolution partner John Reynolds for legal advice in London.

Deutsche Bank received a 30% discount after it agreed to settle during the early stages of the FCA investigation bringing it down from £229m. The discount did not apply to the £9.1m in commission the bank generated from the suspicious trading that it had to pay the FCA.

Director of enforcement and market oversight at the FCA Mark Steward said: ‘Deutsche Bank was obliged to establish and maintain an effective AML control framework. By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime. The size of the fine reflects the seriousness of Deutsche Bank’s failings.’

In a separate settlement announced overnight, the New York’s Department of Financial Services confirmed Deutsche Bank will also pay $425m (£340m) to the state’s main financial regulator. The US regulator said in a statement it had worked closely with the FCA on the enquiry which was related to the same transactions.

Sullivan & Cromwell white collar partner Samuel Seymour advised Deutsche Bank on its US settlement.

madeleine.farman@legalease.co.uk

Legal Business

Clifford Chance leads on Shell’s $3bn disposal of North Sea assets

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Corporate Clifford ChanceWatson Farley and WilliamsWhite & Case

Clifford Chance, Dechert, White & Case and Watson Farley & Williams have all landed roles on Shell’s sale of $3.8bn worth of North Sea oil and gas assets.

The deal sees British investment firm Chrysaor Holdings buy out an initial consideration of $3bn plus an additional potential payment of up to $600m subject to commodity price and $180m for future oil and gas finds.

Chrysaor was advised by Dechert M&A partner Jonathan Angell with specialist oil and gas advice from Bond Dickinson partner Paul Stockley.

Panel firm Clifford Chance were the lead advisers to Shell on the M&A side of the deal, alongside Shell’s in-house team.

White & Case partners Ian Bagshaw and Richard Jones advised energy investment house Harbour Energy Limited, an investment vehicle managed by EIG Global Energy Partners, on its agreement to lead for Chrysaor on the acquisition of the oil and gas portfolio. Watson Farley partner Joe Levin also acted as an adviser for third party banks.

The deal is the third major announcement for White & Case’s private equity team in January. Global private equity head Bagshaw led on Bridgepoint group’s recent £750m buyout of vehicle business Zenith from HgCapital. The team also advised Bridgepoint earlier this month along with Stockholm-based Nordic Cinema Group Holding AB on the $929m sale of Nordic to AMC theatres.

Shell’s divestment to Chrysaor follows its £47bn acquisition of BG Group in 2015. Slaughter and May advised Shell, supported by Cravath Swaine & Moore in the US while Freshfields Bruckhaus Deringer acted for BG.

Anglo-Dutch oil giant Shell reduced its core panel of legal advisers last year from 11 to six firms. Eversheds, Reed Smith Clifford Chance, Allen & Overy, Baker & McKenzie and Norton Rose Fulbright were all understood to have been appointed.

matthew.field@legalease.co.uk

 

Legal Business

White & Case bags another deal for Bridgepoint on Zenith buy

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Corporate Weil, Gotshal & MangesWhite & Case

White & Case, Squire Patton Boggs and Weil, Gotshal & Manges all played key roles in private equity group Bridgepoint’s £750m buyout of vehicle business Zenith from HgCapital.

White & Case’s head global private equity Ian Bagshaw led Bridgepoint on the deal, with Squires partner Jonathan Jones leading for Zenith. Weil corporate partner Jonathan Wood represented HgCapital alongside Simon Saitowitz, Jamie Holdoway and banking partner Reena Gogna.

Zenith is the largest independent vehicle leasing and fleet management business in the UK, and supplies cars for companies such as Greene King, Asda and Santander.

Bagshaw (pictured) said: ‘The complex Zenith acquisition happened swiftly and its success demonstrates the way in which our clients benefit from the strength and in-depth capabilities of our deal teams, and also our increasingly prominent role advising on market leading deals.’

White & Case has now advised Bridgepoint twice in January, with a combined deal value of approximately $2bn. Earlier in the month, Bagshaw advised Bridgepoint and Stockholm-based Nordic Cinema Group Holding AB on the $929m sale of Nordic to AMC theatres.

Weil also took key roles as Advent International and Bain Capital Private Equity agreed to purchase German firm Concardis for $745m.

In November 2016, Bagshaw led White & Case as the firm represented Bupa as part of a deal that saw Bridgepoint sell Oasis Dental Care to the healthcare and insurance provider. While working for Linklaters, Bagshaw also represented Bridgepoint in January 2012 during the PE firm’s acquisition of wealth management business Quilter.

tom.baker@legalease.co.uk

 

Legal Business

White & Case advises as Canadian firm buys UK’s five pound note maker

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Corporate Addleshaw GoddardWhite & Case
legal-business-default

White & Case and Addleshaw Goddard have picked up lead roles as Canadian firm CCL Industries said it would buy Innovia Group for $842m from The Smithfield Group.

Innovia, which supplies the new UK plastic five pound note, makes most of the polymer banknotes around the world. The transaction is expected to close by the first quarter of 2017.

White & Case, which advised The Smithfield Group when it purchased Innovia in 2014, acted for the group of UK investors again with a team led by private equity co-head Ian Bagshaw.

Bagshaw said: ‘Our strong relationship with both organisations ensured we were ideally placed to support this strategically important transaction.’

White & Case’s team on the deal also included London-based Nicholas Greenacre and Lindsey Canning as well as local partner Katarzyna Czapracka in Warsaw.

Addleshaw Goddard acted for CCL Industries, with a team led by Manchester-based partners Richard Lee and Shelley McGivern. Toronto headquartered CCL Industries, which is the largest label maker in the world, has been a client of the firm for more than 15 years.

Lee said: ‘We are delighted to have been able to extend our long-standing relationship with CCL through working with them on this transformative acquisition of such a significant North West based business.’

CCL Industries’ deal follows the £1.35bn purchase by fellow Canadian firm Onex of Parkdean resorts from Electra Partners. Clifford Chance, Latham & Watkins, Travers Smith, Macfarlanes and King & Spalding are among firms to pick up roles on that deal.

victoria.young@legalease.co.uk

Legal Business

Linklaters, Cleary and White & Case advise as Glencore and Qatar take stake in Rosneft

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Corporate Cleary Gottlieb Steen & HamiltonLinklatersWhite & Case
legal-business-default

Linklaters, Cleary Gottlieb Steen & Hamilton and White & Case are advising as Glencore and the Qatari Investment Authority (QIA) offer to take a €10.5bn stake in Russian oil giant Rosneft.

The privatisation deal for 19.5% of Rosneft is yet to be completed, with the Russian state-owned oil firm forced to negotiate the sale around international sanctions. Despite the volatility of the transaction, Russian President Vladimir Putin made a public statement confirming the deal.

Legal Business understands Linklaters is advising Glencore, a long term client of senior partner Charlie Jacobs. Corporate partner and mining sector head David Avery-Gee is also a key adviser to the mining giant. Others from Linklaters team on the deal include finance partner Toby Grimstone and corporate partner Hugo Stolkin.

Cleary Gottlieb is advising the QIA on its side of the deal, while White & Case has been employed by Rosneft on the deal, with Doha-based corporate partner Michiel Visser understood to be acting on the transaction.

The deal to acquire the stake in Rosneft has been highly contentious due to sanctions against Russia from the US and the European Union. Glencore said it would commit just €300m in equity for around 220,000 barrels of oil a day, with the funds for the acquisition of shares provided by QIA.

On Wednesday (7 December), the Kremlin issued a press release claiming the privatisation deal for 19.5% of Rosneft had been completed.

However, Glencore subsequently released a statement claiming the company was still in ‘final stage negotiations’ on the deal.

In another recent mandate for Glencore earlier this year, Linklaters’ Avery-Gee advised on a $2.5bn sale of a stake in its agricultural arm to a Canadian pension fund, which was advised by Freshfields Bruckhaus Deringer.

Linklaters, Cleary Gottlieb and White & Case all declined to comment.

matthew.field@legalease.co.uk

Read more in: ‘Rain men – goodbye Harvard Kool-Aid, hello plain speaking at Linklaters’ c-suite’

 

Legal Business

Finance view – White & Case reinvents its London banking practice with some success

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Finance White & Case
legal-business-default

Madeleine Farman and Victoria Young assess the firm’s reboot after a tough post-2008 run

Traditionally a strong lender side practice in London built around relationships with clients like Deutsche Bank and Goldman Sachs, White & Case’s banking team has moved on since the loss of a four-partner team to Latham & Watkins back in 2010. The exit of then co-head of banking Chris Kandel and his team was a significant hit to a practice that had been established at the peak of the 2000s credit binge as one of the City’s top leveraged shops.