Collyer Bristow has settled its dispute with Scottish football club Rangers for £24m, bringing an end to the long-running litigation over fees the firm was paid following a controversial 2011 takeover.
Liquidators BDO had claimed over £50m in damages for professional negligence from Collyer Bristow in connection with its role advising venture capitalist Craig Whyte, who took over the club in 2011 before placing the club in administration a year later.
BDO issued a statement last week which said: “The joint liquidators are now able to advise that, following protracted negotiations subsequent to a mediation in June of this year, a settlement of the Part 7 claim has been concluded with CB. The settlement sum has been received in full from CB as noted on the attached summary of receipts and payments.”
The settlement has earned BDO’s lawyers, Stephenson Harwood, £596,178 in fees and handed Clyde & Co, advising the former administrators, £49,500. Stephenson Harwood was instructed on a conditional fee basis as a result of a lack of funding when BDO took over the claim. The firm is expected to take home a greater sum after negotiations.
BDO said last week: “SH were entitled to their costs plus an uplift of 75-100 per cent (depending on the stage the proceedings had reached) to compensate them for the risk that they would not get paid if the litigation failed.
“We are currently liaising with the committee and SH to agree the final quantum of these fees, which will be paid out of funds held in the liquidation estate.”
Collyer Bristow was first accused of “deliberate deception” in 2012 by Duff & Phelps, administrators of former football company RFC in relation to Whyte’s doomed takeover of the club (24 April 2012). Last week former Collyer Bristow partner Gary Withey was detained during a dawn raid along with three employees from Duff & Phelps.
In a 2012 High Court hearing the administrators levelled charges of conspiracy, breach of undertaking, negligence and breach of trust against the firm. Taylor Wessing restructuring partners Nick Moser and Neil Smyth advised the adminstrators, instructing South Square Chambers’ Mark Phillips QC, Daniel Bayfield and Stephen Robins.
Collyer Bristow turned to Clydes partner Richard Harrison, instructing 3 Verulam Buildings’ Cyril Kinsky QC and Matthew Hardwick.
When BDO took over the litigation it turned instead to Stephenson Harwood and criticised the state of the claim.
BDO said last week: “Whilst the Part 7 claim had originally been commenced by the previous joint administrators, it had been undertaken in haste and, as a result, the joint liquidators and their legal advisors were required to spend a significant amount of time re-framing the claim and associated legal argument.”
All issues stem from Whyte’s 2011 takeover of the football club. He bought the club from Sir David Murray for £1 in May that year, giving an undertaking to settle its £18m Lloyds Bank debt. It later emerged that Whyte had paid the debt by selling three years of season tickets to finance firm Tucketus for £25m and he was pursued for fraud, along with Duff & Phelps employees David Grier, Paul Clark and David Whitehouse.
Collyer Bristow could not be reached for comment.