Henlys was a long-standing client of Ashurst until it hit financial difficulties, which led its major creditors to bring in company doctor David James in June.
James, who the government instructed on the disastrous Millennium Dome project, always replaces incumbent advisers and has historically had a very close relationship with BLP.
It is understood that Ashurst was retained in support alongside BLP because of its in-depth knowledge of Henlys, but the bulk of the restructuring was done by BLP. The company’s financial advisers, KPMG, were replaced by Close Brothers.
Ashurst missed out on an estimated £1m of fees that BLP is expected to charge for the restructuring. However, it is thought that Ashurst had billed around £1.5m on the complex job before BLP was brought in.
Henlys announced late last month that it had come to an agreement with a syndicate of 14 banks led by Lloyds TSB and the Royal Bank of Scotland, which will see the company move some of its debt burden into its shares.
BLP is now expected to take over the company’s ongoing work.
Ashurst partner Giles Boothman said: “We had enjoyed working with the company and had a productive relationship with the old board, but we recognise that David James’ normal pattern is to change advisers.”
BLP declined to comment, other than to confirm it was advising Henlys.