Travers Smith Braithwaite and Skadden Arps set to clean up on NTL restructuring

Travers Smith Braithwaite and Skadden Arps Slate Meagher & Flom are set to rake in millions of pounds worth of fees after resurrecting faltering cable operator NTL.

At stake is $68.4m (£42.7m) of potential income that NTL, which emerged from Chapter 11 bankruptcy protection more than a week ago, set aside for its plethora of legal, financial and accountancy advisers. This figure, which is an estimate for the nine-month period ending 30 September, could rise even higher as NTL has calculated that additional recapitalisation expenses of $26m (£16.2m) could be incurred in the fourth quarter, although the $26m sum does include costs for employee retention as well as advisory fees.

Travers and Skadden Arps, both long-time advisers to the New York-listed company, declined to comment on what the final legal fees would be. Both firms are understood not to have yet made a formal application for compensation to the US Bankruptcy Court for the Southern District of New York.

Even without a filing, Travers and Skadden Arps, as well as Fried Frank Harris Shriver & Jacobson and Cadwalader Wickersham & Taft, which represented the bondholder committee in the US and UK, have already substantially benefited from the transaction.

Before NTL officially resorted to Chapter 11 in April last year, a chunk of the restructuring plans had already been determined by the law firms involved, which, sources say, the lawyers have already been paid for.

The marathon restructuring of NTL, which was suffocating under $17bn (£10.6bn) of debt, has resulted in bondholders agreeing to convert $10.6bn (£6.6bn) worth of debt into equity.

A syndicate of 50 banks, which had agreed to a reorganisation of significant facilities owned by NTL, was represented by Clifford Chance.

The new NTL has been split into two operations: the former NTL Incorporated houses the European business and is now known as NTL Europe, while the former NTL Communications is now NTL Incorporated and covers the UK and Ireland. But even after the restructure, NTL will still have an astronomical £4bn worth of debt to contend with.

The advisers

Advisers to NTL
Travers Smith Braithwaite
(Spencer Summerfield (UK))
Skadden Arps Slate Meagher & Flom (Thomas Kennedy (US))
Credit Suisse First Boston
JP Morgan Chase
Ernst & Young
Caine & Reece

Advisers to the bond committee
Fried Frank Harris Shriver & Jacobson (Brad Scheler (US))
Cadwalader Wickersham & Taft
(Andrew Wilkinson (UK))
UBS Warburg
Deloitte & Touche
Adviser to the banks
Clifford Chance (Mark Hyde)