Freshfields, Linklaters advise on Woolies administration
Linklaters advise on Woolies administration" />The administrators of Woolworths have called on Freshfields Bruckhaus Deringer and Linklaters to help wind up the stricken retail giant.
Freshfields restructuring partner Adam Gallagher has been instructed by Deloitte for the administration of Entertainment UK, Woolworths' wholesale arm.
Linklaters is understood to be advising Deloitte on the administration of the company's retail arm.
The leading lenders to Woolworths, Burdale and GMAC, are also being advised by Linklaters through partners David Ereira and Richard Bussell.
Freshfields restructuring partner Ken Baird, corporate partner Mark Trapnell and banking partner Neil Falconer have been advising the debt-ridden retailer in rescue talks this week.
A deal between the BBC and Woolworths was thought to have provided enough cash to appease creditors, paving the way for the chain to be sold to restructuring specialist Hilco, which is understood to have been represented by CMS Cameron McKenna.
Hilco had previously offered £1 to take on 840 High Street stores as well as a portion of the group's £385m debt.
On Tuesday night (25 November) BBC Worldwide agreed to pay more than £100m to buy Woolworth's stake in a joint venture between the two companies called 2Entertain.
The BBC was represented by Olswang, which advised on the launch of 2Entertain in 2004. The deal is subject to approval from the BBC Trust.
The joint venture, which produces DVDs such as Blue Planet and Doctor Who, is 60 per cent owned by the BBC, with Woolworths holding the remaining 40 per cent.
Trading in Woolworths' shares was suspended yesterday amid speculation that the company was about to go into administration.
It has been reported that the company's biggest shareholder, property tycoon Ardeshir Naghshineh, would consider legal action against the Woolworths board if it was to collapse.
The fall of the retailer will put some 30,000 jobs at risk.
Readers' comments (7)
craterbaiter | 27-Nov-2008 12:39 pm
30,000 unemployed offset by a few million into liquidation team wallets
30,000 newly unemployed weekly income earners, while several millions in cash is paid out for the intellectual efforts of the liquidation team.
The same old tired formula, the top tier firms get appointed in preference to equally able though much less expensive lawyers, to do routine closing down: sack staff, arrange fire sales to well represented parties, charge a fortune take their slice leaving the liquidators to hammer the proceeds. Often there is nought left, but only after several years of tedious paperwork and delays. Meantime, the general shareholders get thoroughly screwed and the board plus advisors before the event: in house accountants and legal eagles , and the auditors just walk off with nary a mark on them.
Just how many directors , accountants and lawyers does it take to read the writing on the wall? Woolworths was trading into an illiquid position, but that did not happen in a week.
Is the entire City staffed by simple minded optimists that cannot read a financial forecast and the need for cash flow?
Why not consolidate the ‘profitable’ shops , offer staff options of reduced salary or extra hours to get through the slump and get Darling on board to buy a temporary equity stake to fund the creditors and keep those jobs in place.
Better spend the money there than making the ‘few hundred’ in the City purringly obese with taxpayer largesse.
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John | 27-Nov-2008 12:54 pm
I agree
here here
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Anonymous | 27-Nov-2008 2:28 pm
a bit more realism
As far as appealing to Darling, the government have declined to get involved as the collapse is the result of systemic failures in the business model rather than as a result of the credit-crunch fall-out.
Hoping that Woolworths could carry on through is simply wishful thinking, and blaming the law firms involved in the administration solves nothing.
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Anonymous | 27-Nov-2008 4:09 pm
Woolworths
Bravo, well said.
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Fast Eddie | 27-Nov-2008 4:50 pm
Woolworths - in perspective, now?
At least the collapse of a major retail chain or two puts the economic downturn into a better perspective for the rest of us; as a "small" firm Senior Partner, we have seen a massive downturn in fees this year, and have had to completely re-work our business model.
Survival is the key priority, but if we get through it, we will come out much harder and leaner than before. Shame the "big boys" can't see the reality of the trading climate, through their own arrogance?
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craterbaiter | 27-Nov-2008 5:15 pm
Uncharitable and not well said..
tosh....
''Date: 27-Nov-2008 @ 14:28PM''
''From: Anonymous''
''As far as appealing to Darling, the government have declined to get involved as the collapse is the result of systemic failures in the business model rather than as a result of the credit-crunch fall-out.''
That is well thought out and at a complete tangent to the proposal -to rescue those shops with profitable potential- your comment completely ignores the cost and misery created by the unemployment of 30,000 weekly wage earners as we near the dead of winter. You heartless wretch. It would seem a given that the Directors in Woolworths have dismally failed to grasp the basics of their own business, but to suggest that it has nothing whatever to do with the banking financial meltdown is simple minded. For anyone in Government to suggest the two events are unconnected is typical political quackery.
''Hoping that Woolworths could carry on through is simply wishful thinking, and blaming the law firms involved in the administration solves nothing.''
Agreed that the prospect of Woollies shuffling onward is wishful thinking and I doubt anyone would be so clueless as to offer that board of Directors another shot at ignominy. A restructured reduced organization could salvage a heap of jobs and if clever clogs and pals were to apply the brains they are being paid to use , a formula could be hacked out in a few days.. Now that would be money well spent on top tier lawyers.. They typically manage during the odd weekend here and there to salvage ruined banks who are no less at fault for their own demise..
As to blame, methinks you read too fast, where does my comment suggest 'blame'? Perhaps I failed to properly describe my thoughts; for that I apologize. The intent was to point out that top tier firms with huge overheads were being brought in to bury Woolworths, a job more effectively done by a less expensive organization of grave diggers, thereby leaving more residual fund for the creditors /shareholders. No blame just mildly stunned by the blatant waste of money.
Your rise to defend the 'law firms' has a sense of insider thinking gone astray, perhaps stung being linked to one or other law firm now in the fray?
In any event , as you raise blame, why not blame someone for something that has gone terribly wrong, seemingly in a matter of days, ho hum? There are lessons to be learned and often that requires a degree of public blameworthiness and opprobrium. As we all know business is founded in two arcane worlds: accounting and law, it's moot which is more blameworthy and why should we be deprived of a bit of blaming?
Pip pip
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Anonymous | 24-Dec-2008 3:02 am
Erm...
Somebody has an axe to grind...
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