In 2000, Linklaters won the high-profile role of advising Desmond on …
Linklaters is being sued for £2.1m by Richard Desmond’s Northern & Shell for allegedly acting negligently on the first job it was ever instructed on by the company.
In 2000, Linklaters won the high-profile role of advising Desmond on his £125m purchase of the Express Newspapers group from United Business Media.
In November 2001, Linklaters sued Northern & Shell for not paying its fees of £1m.
Now Northern & Shell is suing Linklaters for allegedly not advising properly on a tax deed, which the company says forced it to pay an unnecessary £2.1m of corporation tax for the newspapers in the Express stable. The firm says it will be defending the proceedings vigorously.
According to Northern & Shell’s High Court claim against the firm, Linklaters led the company to believe the purchase was “cash-free and debt-free” when in reality, because of the corporation tax bill, it was not.
The claim form states: “Linklaters advised Northern & Shell… that the tax deed was in a standard form and was reasonable, fair and consistent for this transaction (being the purchase of a business on a ‘cash-free and debt-free’ basis by the means of purchase of shares). It was not.”
Linklaters won the role on the original deal because Northern & Shell’s main corporate adviser, Ashurst Morris Crisp, was conflicted out at the time.
Commerzbank, the company’s financial adviser, recommended Linklaters, which put together a 31-strong team under the leadership of a senior assistant (The Lawyer, 27 November 2000).
A Linklaters statement on the case reads: “We can confirm that Northern & Shell has issued proceedings against Linklaters in relation to one aspect of the firm’s role in Northern & Shell’s acquisition of Express Newspapers in November 2000. We’ll be defending these proceedings vigorously.”