Linklaters usurps Freshfields to advise new Northern Rock board; Slaughters to advise on nationalisation” />Linklaters has been handed a key mandate in the Northern Rock saga as rival magic circle firm Freshfields Bruckhaus Deringerlooks likely to be marginalised.
Linklaters partner Charlie Jacobs has been instructed to advise the bank’s new chairman Ron Sandler as well as the board Sandler has appointed to run the bank, assuming nationalisation goes ahead.
Meanwhile, Freshfields’ role, which was to advise Northern Rock as a takeover target with finance partner Alan Newton leading, has become unclear. The firm is still being retained as a Northern Rock adviser, but it is unclear what its role would be once the nationalisation process gets under way. Freshfields declined to comment.
It is believed that since instructing Freshfields last September Northern Rock has clocked up fees of around £10m with the firm. That bill will fall into the Treasury’s hands post nationalisation. Again, the firm declined to comment.
Appointees to the board of the Northern Rock, which is expected to pass into public ownership within the next few days, include former Swiss Re finance director Ann Godbehere, former Abbey finance director Stephen Hester, Gordon Brown’s former principal private secretary Tom Scholar and Philip Remnant, chairman of the Shareholder Executive.
It is understood that each member was advised by Jacobs before accepting their position. Jacobs will also give ongoing advice to the board in relation to risk and documentation, although it is not anticipated he will have a major role in the actual nationalisation.
Parliament is currently debating a bill that is expected to see Northern Rock pass into public ownership by the end of this week. Slaughter and Maycorporate partner Charles Randell, who advised the Government on the restructuring of British Energy as well as the privatisations of British Gas and the electricity industry in England and Wales, is guiding the Treasury through the nationalisation process.
It is thought that Slaughters’ legal bill to date is somewhere in the region of £3m, but that is expected to rise significantly when post nationalisation work gets underway. The firm declined to comment.
Magic circle firms Clifford Chance and Allen & Overywere also handed key instructions in the early days of Northern Rock’s troubles. Clifford Chance partner Nick Frome advised the Bank of England on the multi-billion pound loans it made to keep Northern Rock solvent, while A&O partner Andrew Balheimer advised Northern Rock on that borrowing facility.
Linklaters was also involved early on, advising client Lloyds TSB as a potential buyer for the Rock. Lloyds walked away from the deal before Northern Rock’s troubles became public knowledge.