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Mediation veteran faces uphill battle in Halliwells-BDO £20m windfall negotiations
The Halliwells reverse premium was possibly one of the most unfortunate and highly criticised decisions ever made by law firm management, and it will be a test to see if the matter can be settled in mediation proceedings that take place later this month.
For those unaware (surely there are none of those left in the legal market), the reverse premium decision concerned Halliwells’ Spinningfields office. The firm took out a 25-year lease on the office and, as an incentive, received part of the freehold, which it then sold to landlord Allied London in 2007 for £24.5m; £20.4m of that money went straight back into the pockets of 32 of the firm’s equity partners.
Following the collapse of the firm, Halliwells’ liquidators - formerly the administrators to the firm - BDO partners Dermot Power and Shay Bannon launched a High Court claim to recover the funds from the ex-partners, but in September 2011 it emerged that the parties had consented to mediation.
Last week (9 April) The Lawyer revealed that the parties would go to mediation later this month, with Michel Kallipetis QC picked to oversee proceedings. The mediation will take place in London, although it is not yet known where. Mediations can take place in the strangest places - one practitioner told The Lawyer he has held talks in a motor museum, a council flat and the showroom of a Mercedes dealership.
Kallipetis is an elder statesman of the mediation world - highly respected by his peers and known for his ’avuncular manner’ and ’passionate belief in arbitration’s worth’, but whether there will be enough common ground even for this seasoned hand to eke out a resolution remains to be seen.
It is possible a positive outcome could lead to more mediations in relation to Halliwells, but don’t hold your breath. It is highly likely that the 14 former Halliwells fixed-share partners considering action against the former equity partners hold far more animosity towards their old firm’s management than BDO does.