Beware the ‘tail gunner’ — Edmond de Rothschild Securities (UK) Ltd v Exillon Energy plc
The High Court recently upheld a so-called ‘tail gunner’ clause, entitling an adviser to a substantial success fee even though their engagement had been terminated.
It is common market practice for the engagement letters of financial advisers appointed on corporate transactions to provide for a fee to be paid on the successful conclusion of the matter. Given that such engagements can typically be terminated at fairly short notice, however, this leaves the adviser at the risk of a client terminating their engagement before completion in order to avoid paying the success fee. To overcome this, the adviser’s engagement letter will often include a ‘tail gunner’ clause providing that if the transaction completes within a specified period after the engagement has been terminated, then the success fee will still be payable by the client.
In a recent case, a shareholder was causing problems for a company, publicly criticising the board and proposing resolutions at a general meeting that, if passed, would remove the existing chairman and appoint a number of the shareholder’s nominees to the board…
Click on the link below to read the rest of the Gateley briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Briefings from Gateley
In a recent Technology and Construction Court case the court enforced an adjudicator’s decision even though the adjudicator had clearly overlooked a document that would have reversed his decision.
The decision in Lock v British Gas Trading Ltd has been handed down, confirming that holiday pay must be calculated to include commission payments too.
Analysis from The Lawyer
The Law Society recently published guidance to assist solicitors draw up Shariah-compliant wills, causing outrage in some quarters. Gateley’s Haroon Rashid explains the facts.