Remember the heady boom days, when deals were ten a penny and time was hard to find? While countless acquisitions were rushed through in record time, it looks like Eversheds could be taking the heat for the legal sector in terms of cutting corners on the due diligence front.
The firm was today named in an otherwise damning report on the collapse of car manufacturer MG Rover, with the report’s authors, Guy Newey QC of Maitland Chambers and Gervase MacGregor of accountants BDO Stoy Hayward, finding that the firm left more than a few stones uncovered when acting on Phoenix Venture Holdings’ 2000 acquisition of Rover (see story).
Ultimately the report, which the Government commissioned in a bid to find out what led to Rover’s eventual demise, is not overly critical of Eversheds.
But one disclosure in particular is a salutary warning never to be too honest in an email.
When Phoenix’s acquisition completed, Eversheds partner Mike Seabrook sent the following message: “Congratulations and thanks to everyone for a great job in completing Phoenix within an impossible timetable - even if we don’t know what we have bought or what any of the agreements say!!”
Red faces all round.
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