Rivals court Credit Suisse as bank pursues Links in prof neg case
A number of City firms are muscling in on Linklaters’ relationship with Credit Suisse after the investment bank launched legal action against the firm.
Credit Suisse is preparing a professional negligence claim for e136m (£115.2m) over Linklaters’ advice to Credit Suisse in 2001 on a e500m structured finance deal with Parmalat (The Lawyer.com, 11 February).
Herbert Smith won a number of mandates from the bank recently, including a €3.4bn capital-raising for Bank of Ireland and Prudential’s e21bn rights issue.
A senior partner at a top 10 firm said that, although his firm would never usually get near Credit Suisse, it has recently made a number of pitches to the bank.
Credit Suisse last month sent a letter before action to Linklaters through Allen & Overy (A&O) (11 February 2011). The claim concerns money recovered from the bank in 2003 by Parmalat’s administrators. The money was originally paid to Credit Suisse in a forward-sale agreement at the time of the 2001 deal.
The bank claims that Linklaters capital markets partner Simon Firth did not acknowledge the risk posed by the possibility of Parmalat going into administration.
A&O litigation partner John O’Conor is thought to be acting for Credit Suisse, which is also being advised by Brick Court Chambers’ Jonathan Sumption QC, Mark Howard QC and Tom Adam QC. Clyde & Co is acting for Linklaters, which declined to comment.
Readers' comments (7)
Anonymous | 14-Feb-2011 9:46 am
Credit Suisse is to soon realise that using smaller firms isn't such a bad idea.
The larger law firms get instructions from the top banks because the firms have more to spend on fancy lunches and days out for the banks' in-house lawyers.
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Stephen Pipes | 14-Feb-2011 11:00 am
@ Anonymous | 14-Feb-2011 9:46 am - Credit Suisse is highly unlikely to start using small firms in place of Linklaters.
The problem that Linklaters displayed was a lack of internal controls, this could affect a firm of any size. Larger firms have more resources to spend putting in place such controls. The problem is, as with Linklaters, that too much of the resources are instead used to make super-normal profits.
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City watcher | 14-Feb-2011 11:53 am
@Stephen Pipes
I hardly think Credit Suisse are ever going to use some tinpot firm based in Rotherham or wherever, but this is going to be a nice opportunity for Simmons, Herbies, Ashursts and their ilk. Agree re over-focus on profits though.
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Anonymous | 14-Feb-2011 12:16 pm
I agree with the first poster: Anonymous | 14-Feb-2011 9:46 am
Smaller can mean the dozen or more silver circle firms out there. If MC firms can make mistakes like this, what is the point of using them? Save a buck and go silver circle, Credit Suisse.
Out of interest, does anyone know how much of its business Credit Suisse has already moved from Linklaters as a result of this litigation?
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Anonymous | 14-Feb-2011 5:32 pm
Some years ago, I acted for a liquidator pursuing a bank. Links acted for the bank. Following a meeting at Link's offices at which the bank's in-house lawyer was present, we were waiting for the lift. The liquidator, marveling at the marble columns, asked how Links could afford such sumptuous premises. The Links solicitor said ("oh, the client pays!"). The journey down several floors in the lift was icily silent.
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Seraphin | 15-Feb-2011 8:19 am
More facts!
What does it mean when you say in this article and your other article that Linklaters failed to acknowledge the risk on Parmlat going into insolvency? In the other article, you mention advice from a local Italian firm - do you know if this was the alleged bad advice or is it alleged that Linklaters failed to highlight this advice, attribute the right weighting to the possible consequences of the advice or to pass the advice on at all?
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Anonymous | 1-Mar-2011 5:11 pm
@ anon 14 Feb 5.32pm. I have been at numerous meeting at Links' offices. I have never seen a marble pillar (I don't particularly like their reception, but no marble to be seen). The same was true of their old offices. And, except for those who can't manage the stairs, I'm not sure why you'd be leaving the offices by the lift - that isn't the way out.
You are of course right that the revenue to pay for premises comes from clients (the same is true of all firms). But if you want to illustrate the point, at least use a real, rather than made up, story...
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