Law firms move in on Railtrack administration

More firms have swooped on the rich legal pickings of the Railtrack administration. Ashurst Morris Crisp has picked up an instruction acting for the directors of Railtrack, while Theodore Goddard has won work for the trustee for Railtrack’s bondholders, Law Deb-enture, at the expense of Linklaters & Alliance, which was conflicted out.
Linklaters was the main adviser to the Government when Railtrack listed on the stock exchange in 1996. Since listing, Railtrack carried out £1.5bn worth of bond issues, with Linklaters as the adviser to the trustee.
Linklaters is now advising the Strategic Rail Authority on Railtrack’s successor, so Law Debenture has turned to Theodore Goddard. Linklaters has also been replaced by CMS Cameron McKenna as the main adviser to the Government on Railtrack.
Law Debenture was also trustee to the bondholders of Barings Bank, and Theodore Goddard advised the company on the Barings administration.
Theodore Goddard banking partner Jayesh Patel is leading the Railtrack team. He is unsure as to what action Law Debenture will take. He says his client is on the side of the bondholders, such as Commerzbank, and is unsure whether they will take separate legal action. Law Debenture, as a trustee, has not lost any money in the Railtrack administration.
Patel has also been slow to move in on Railtrack, as a Government standstill has been imposed until the administration is completed.
Patel said: “We’re mainly looking at the terms of the proposal to bondholders at the moment. The bondholders aren’t in a litigious position against my client yet; it’s mainly the shareholders who have a case, as they have a concern with the 1996 listing, which is separate to the subsequent bond issues.”
Railtrack is facing a slew of class actions from shareholders, with a range of law firms taking the work.
Edwin Coe Solicitors has formed a Railtrack Private Shareholders’ Action Group.
Financial litigation firm Class Law and Allen & Overy are also preparing class actions for groups of Railtrack shareholders.
Class Law officially launched the Railtrack Action Group last Friday. The group, fronted by ex-British Lions Rugby player Andy Ripley, has 3,000 members. Class Law partner Stephen Alexander said that the firm was looking at the Government’s role in Railtrack since 1990 to work out its exact responsibility to the company’s shareholders.