Brown Rudnick in line to represent Co-op bondholders over ‘£500m loss’

Brown Rudnick is advising a campaign representing up to 15,000 Co-operative Bank retail bondholders raising concerns about the lender’s £1.5bn restructuring.

London restructuring partner Louise Verrill is acting for Fixed Income Investments (FII), a group led by Mark Taber that handles retail bondholder interests.

Junior bondholders will potentially lose £500m as a result of the deal, according to press estimates.

Co-operative bank

While no formal instruction has been made, Taber is in discussions with Verrill and her team at Brown Rudnick over possible options.

Verrill is working alongside fellow City restructuring partner Patrick Elliot.

Taber is gathering support from investors in two issues of Co-op bonds, who he claims number 15,000 individuals and charities.

However, a Co-op spokesperson said it had calculated 7,000 retails bondholders including both individuals and investments through nominees.

Taber has remained in communication with Verrill since she advised an investor group rallied by him in relation to the Bank of Ireland’s capital raising of in 2011, with Allen & Overy (A&O) advising the Bank of Ireland. The US firm forced the Dublin lender to withdraw its permanent interest bearing share bond from the recapitalisation.

A&O is also advising Co-op Bank, with a team including partners Alistair Asher and Richard Slynn on the matter (17 June 2013).

Asher is set to join the Co-operative Group as general counsel on 1 July (18 June 2013).

The Financial Times reported today (26 June) that arguments expected to be made by lawyers acting for the bondholders would relate to the Co-op Group’s fiduciary behaviour and potential conflicts of interest within the group and advisers.

The paper also said Bingham McCutchen had been approached by US hedge fund Aurelius for advice on behalf of hedge funds investors.