Ashurst and Weil lead as MF Global files for bankruptcy protection

Ashurst and Weil Gotshal & Manges have won key London roles after broker MF Global filed for Chapter 11 bankruptcy protection in the US and went into administration in the UK.

Mike Francies
Mike Francies

Weil has put 30 fee-earners on the deal, with one City restructuring partner predicting that there are around 100 mandates for firms to win on the international insolvency.

The restructuring has so far given further roles to Shearman & Sterling, Skadden Arps Slate Meagher & Flom and Kirkland & Ellis.

The US-headquartered broker filed for Chapter 11 bankruptcy in New York on Monday morning. It had previously been suspended as a primary dealer by the Federal Reserve Bank of New York.

The Chicago Mercantile Exchange and ICE had already suspended the company’s trading, while NYSE Liffe had permitted liquidation-only trading for MF Global’s clients.

MF Global UK’s insolvency has led to the first filing under the new Special Administration Rules, which aims to support creditors and increase the chance of returning client money and remaining assets when a company is being wound up.

The company filed for insolvency in the UK under these rules last night (31 October) after London lawyers at Weil made an expedited application for KPMG partners Michael Pink, Richard Fleming and Richard Heis to be appointed as special administrators.

Martin Pascoe QC and Daniel Bayfield of 3-4 South Square worked with them.

The fast-paced nature of the situation meant the company has turned to regular advisers, with Sullivan & Cromwell and Skadden being hired in the US and Weil in London.

Weil’s team for MF Global UK and the administrators was led by London restructuring head Adam Plainer. He was assisted by London managing partner and corporate lawyer Michael Francies, finance and restructuring partners Paul Bromfield and Dominic McCahill, structured finance partner Steven Ong and eight other fee-earners including of counsel, associates and trainees.

“From the time of the first meeting with MF Global UK on Friday morning, Adam and the team have worked round the clock to help MF Global to stabilise this challenging situation in the UK,” Francies said.

MF Global hired Skadden New York corporate restructuring partner Ken Ziman and Sullivan & Cromwell restructuring partner Andrew Dietderich, also in New York.

Kirkland & Ellis is understood to have won work from creditors.

The Financial Services Authority instructed Ashurst litigation head Ed Sparrow, restructuring partner Giles Boothman and regulatory partner Rob Moulton for advice on the implementation of the new UK rules.

Glen Davis QC of 3-4 South Square acted for the FSA in court.

Although not on the scale of the Lehmann Brothers collapse in 2008, the MF Global demise is seen as a potential case to fuel more insolvencies and provide a wealth of work for restructuring lawyers. One partner said the number of creditors meant there were approximately 100 mandates for firms to win.

The Lehmann case gave a huge number of mandates to firms including Linklaters, which put 20 partners on the UK administration instruction (19 September 2008).