Taylor Wessing sues Nixon Peabody after merger talks fall apart

Taylor Wessing sues Nixon Peabody after merger talks fall apart" />Taylor Wessing's French office is suing Nixon Peabody for $5m (£2.56m) plus punitive damages after the US firm allegedly poached 13 Taylor Wessing partners in violation of a non-disclosure agreement after botched merger talks between the firms.

Taylor Wessing’s remaining Paris partners filed the action in the New York City Supreme Court on 1 August. The action said that in July 2007 they had talked about defecting from Taylor Wessing to become Nixon Peabody’s Paris office.

Taylor Wessing France alleged that prior to the merger discussions, a mutual non-disclosure agreement was signed between the firms prohibiting either party from “solicit[ing] each other’s partners, lawyers or employees should the discussions not come to fruition”.

Taylor Wessing’s former managing partner, Arnaud de Senilhes, is accused of having led the discussions with Nixon Peabody. The talks were terminated by letter on 3 November 2007.

With the agreement of the Paris office’s other equity partners, de Senilhes is alleged to have written to Nixon Peabody: “We do not intend to continue at this stage with any discussions that we have had with Nixon Peabody concerning a potential combination of [Taylor Wessing France] with your firm.”

The suit alleges, however, that “in blatant violation of his most basic fiduciary duties, de Senilhes surreptitiously continued negotiations with Nixon and with various of [Taylor Wessing France’s] non-equity partners to form a Paris office for Nixon Peabody comprised of such partners and associates.”

De Senilhes claims that he terminated the non-disclosure agreement’s restrictive covenants in his letter to Nixon Peabody on 3 November, which ended the merger talks.

Taylor Wessing France is suing for breach of contract, aiding and abetting breach of fiduciary duty, tortuous interference with advantageous business relations. The firm is also seeking an injunction against Nixon to prevent the US firm from hiring de Senilhes and the 12 Taylor Wessing France non-equity partners.

Taylor Wessing France’s case, which is brought in New York City, follows Nixon Peabody filing a summons in Rochester in the New York State county of Monroe, where the firm is headquartered.

Nixon Peabody is understood to be seeking an injunction and $1m (£512,000) plus punitive damages from Taylor Wessing for tortuous interference with advantageous business relations. The US firm’s claim is based on a letter received from Taylor Wessing which told Nixon Peabody that that under that non-disclosure agreement it was not entitled to hire De Senilhes or any other fee-earners.

Nixon Peabody said in a statement: "Nixon Peabody looks forward to working with a team of partners from Taylor Wessing France as we expand our international presence to better serve our clients and seek new opportunities in Europe."

The statement continued: "Taylor Wessing France has aggressively tried to prevent partners from leaving to work with Nixon Peabody, by improperly relying on an agreement Taylor Wessing terminated nine months ago. We desire a prompt resolution of this issue as we move forward with our plans for serving the European market."

Taylor Wessing UK managing partner Michael Frawley told The Lawyer: “I think it’s pretty obvious this will do material damage to the Paris office, but we are confident in the leadership of [current managing partner] Christian Valsamidis and the other Paris partners and that we will be able to continue on.”

Frawley added that the Taylor Wessing international management board was not at any time involved in merger discussions with Nixon Peabody or any other US firm.

De Senilhes has accepted an offer to become a partner at Nixon Peabody on 24 July and ceased being a partner of Taylor Wessing on 25 July. Valsamidis had been elected to replace him a month previously (as reported by The Lawyer 19 June).

Taylor Wessing is represented by New York firm Dreier.

Due to the nature of Taylor Wessing’s firm structure, each of the international offices operate as separate legal entities.