MFI’s management, advised by Speechly Bircham partner Andrew Clarke, has taken control of the company with financial backing from private equity house Merchant Equity Partners (MEP) after a weekend of crunch talks.
MEP, which bought the group for £1 in 2006 but has now given up its stake, turned to Salans and Ashurst.
The high street chain had drafted in insolvency specialist Kroll before the rescue package was announced, and it would have been the largest retailer to fail since the credit crunch began. MFI could still be put into ‘pre-pack’ administration, then removed, in order to close up to half of its 200 stores.
Salans global restructuring chief Bryan Green is leading the team representing MEP along with corporate head Richard Thomas and real estate consultant Alison Gaines.
The firm won the instruction because of its relationship with Hilco Trading, one of two major investors that fund MEP’s activity.
Goldman Sachs, the other main investor in MEP, has instructed Ashurst private equity partner Steven Lloyd.
SJ Berwin restructuring partner Mike Woollard was drafted in to advise MFI Retail and MFI Properties.
The firm had been involved in the 2006 transaction, advising MEP when bought the kitchen chain for £1.
Berwin Leighton Paisner (BLP) is understood to be advising MFI on property matters.
MFI chief executive Gary Favell said the rescue would secure the future of the company and ensure it was “business as usual” for its customers and 3,100 staff.