The Government-commissioned report, which was carried out by Guy Newey QC of Maitland Chambers and Gervase MacGregor of accountants BDO Stoy Hayward, found that Eversheds was unable to do full due diligence in relation to Phoenix Venture Holdings’ PVH acquisition of Rover.
Eversheds usurped Wragge & Co as Rover’s go-to adviser when the company was reborn as MG Rover following Phoenix’s 2000 acquisition from BMW.
After MG Rover went into administration in 2005 the Government commissioned the investigation into the company’s demise.
While the report criticised Eversheds in some respects it did not find that the firm’s advice contributed to the company’s collapse. The report pointed out that PVH did not follow Eversheds’ advice to the letter, particularly in relation to the sale of its parts business Xpart to Caterpillar Logistics Services (Cat), a deal that was designed to keep MG Rover afloat.
“While those concerned may have understood Eversheds to have endorsed the basis on which Xpart was transferred to PVH, the way in which the proceeds of the sale to Cat were treated did not accord with advice which Eversheds had given,” it said.