After Cadwalader Wickersham & Taft was slammed by Mr Justice Jacob for trying to place Slaughter and May client Colt Telecom into administration, the two firms have entered the ring again to fight over the refinancing of MyTravel.
Slaughters partner William Underhill, who worked on the Colt litigation, is leading MyTravel’s fraught discussions with its convertible bondholders. Cadwalader London managing partner Andrew Wilkinson, who led the attack on Colt for Highberry, a bondholder owned by a US vulture fund, is acting for MyTravel’s bondholders.
MyTravel has just announced refinancing plans that may crater if the convertible bondholders do not agree to extend the maturity of their loans, which are redeemable in January 2004.
The bondholders have taken an aggressive position, demanding a larger chunk of MyTravel’s equity in return for agreeing to the proposed refinancing package.
Slaughters partner Richard Slater has already finalised a £1.3bn refinancing package for MyTravel with its lending banks, represented by Allen & Overy partner Peter Schulz. Underhill, one of the top corporate lawyers in the City, is thought to have been chosen to tackle Cadwalader and its bondholder clients because discussions are about to become heated.
One restructuring lawyer said that Cadwalader has not toned down its aggressive negotiating style since the Colt judgment, but added that the firm has a stronger position over MyTravel.
MyTravel is in true financial difficulty, while Colt had net assets of nearly £1bn when Cadwalader led Highberry’s assault. MyTravel must strike a deal with bondholders to extend its January 2004 loan repayments by 30 September, while Colt was not due to pay back its loans until at least 2005.
One lawyer close to the discussions questioned whether Cadwalader’s presence at the table would lead to gentle negotiations. “Cadwalader in London has built up a successful business encouraging bondholders’ activism,” commented the lawyer.
But another senior restructuring lawyer saw it differently. “If the bondholders have chosen Cadwalader, then all I can say is they must have some serious issues and a lot riding on this deal,” he speculated.