Recovering from the economic boom

At a time when the Society of Practitioners of Insolvency (SPI) was voting to change its name to the Association of Business Recovery Professionals (see pages 12 and 15), in order to dispense with the dreaded word “insolvency”, along came the two biggest UK receiverships for a long time – TransTec and Versailles.

And which firm snatched both jobs? Not Linklaters or Herbert Smith – both of which have made noisy hires in this area – and not Lovells or A&O, which combine an insolvency track record with global reach. No, the winner was none other than Wilde Sapte, whose lesser resources have forced it to concentrate, unfashionably, on the domestic workout and insolvency market.

In fee terms, of course, TransTec – a plc with 29 subsidiaries – is a biggie. Wilde Sapte, which is fielding a team of six partners and 20 assistants full-time, is certain to bill in the millions on this job alone.

It represents a triumphant return to fee-earning by Wilde Sapte senior partner Mark Andrews. One of only three lawyers rated as five-star by The Insider's Guide to Corporate Rescue and Insolvency, Andrews is reunited with his old colleague from Leyland DAF days, John Talbot, a partner at Arthur Andersen, one of the TransTec receivers.

Meanwhile, on Versailles, Nigel Barnett and Mark Gill are advising Tony Lomas and Neville Kahn of PricewaterhouseCoopers.

Insolvency specialists have been starved of work over the past few years. Not just because of the economic boom, but because of a new focus on debtor-led restructurings and turnarounds. Among the accountants, Arthur Andersen and Ernst & Young have radically reduced their teams of late, and many law firms have followed suit.

It may be with the benefit of hindsight, but Andrews is naturally convinced that the Wilde Sapte approach works. “It shows how wise we were to preserve intact the depth and breadth of expertise here,” he asserts. “There is nobody else who could roll out that number of experts.”

That message has certainly convinced the accountants. “Wilde Sapte has huge strength in depth,” says PwC partner Tony Lomas, receiver of Versailles. “They're utterly dependable.”

But TransTec and Versailles also represent a coup in morale terms, confides one insider, who says the mood at Wilde Sapte is “cock-a-hoop”.

From Wilde Sapte's point of view, the timing could not be better. The jobs came in just weeks before the merger with Denton Hall, and also in the wake of the unsettling departures of banking partners James Johnson and Nick Syson, for Clifford Chance and Linklaters respectively.

Both Johnson and Syson have left a hole in Wilde Sapte's restructuring capability. The pair were highly rated by key clients HSBC and NatWest – the very two banks which led on TransTec and Versailles.

Even though Johnson has spent most of his time recently on acquisition finance, he continued to be a first port of call on bank workouts.

Indeed, according to one insider, the call from HSBC on the TransTec support operation prior to the receivership originally went in to Johnson, even though fellow banking partner Graham Paine eventually ran the job.

In Paine, who continues to be NatWest's number one outside counsel, Wilde Sapte has one of the most respected workout lawyers around. Even though he is considerably less visible than the ebullient Johnson.

A leading insolvency practitioner says: “Graham Paine is absolutely great. But what he does not do is slap you on the back and crack a joke like James Johnson – he is a more reserved character.”

But Wilde Sapte will have to counter the perception among lenders and accountants alike that the restructuring side has faltered with Johnson and Syson's departure.

As the Wilde Sapte finance practice regroups and integrates itself with Denton Hall, its competitors may jostle for position.

Any beneficiaries are likely to be the City big boys. Linklaters partner Robert Elliott – himself a former Wilde Sapte lawyer – has made considerable inroads into NatWest.

With the arrival of Syson, another NatWest golden boy, Linklaters' position in London-based multi-bank restructurings would have been considerably strengthened had Syson not been posted to Asia to join Jo Windsor's Indonesian restructuring practice.

And Allen & Overy – despite many competitors' hopeful assertions that it has “gone a bit quiet” – is also motoring. It was involved in TransTec's support operation, and was therefore conflicted out of the receivership.

In a sense, Wilde Sapte's traditional pragmatism – which occasionally verges on diffidence – has worked against it. As a leading accountant said last year: “They almost punch below their weight, in a way. Mark Andrews and Graham Paine are probably two of the best lawyers in the marketplace, so you'd expect to see them everywhere.”

His words have a prophetic ring. With Mark Andrews now back in the marketplace full-time and freed from firm managerial responsibilities, expect to see some energetic networking.