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Recent posts

Shell's disposal to private equity

Marc Hammerson
Marc Hammerson
28 February 2017 - 0 comments



Marc Hammerson, Partner

Sam Gill, Trainee solicitor

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Defaulting loans – helping borrowers negotiate the minefield

Eddie O'Hanrahan
Eddie O'Hanrahan and Ned Beale
27 January 2017 - 0 comments

When things go wrong under a financing arrangement, there is a considerable body of legal, commercial and practical guidance out there for lenders. By contrast, corporate borrowers are not so well catered for. 

Our short note is intended to fill this gap by providing borrower focused guidance in the unhappy event that a material breach has (or is alleged to have) occurred under a funding document, leading to a potential or actual event of default and enforcement action.

Legal concerns:

Commercial and other practical concerns:

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Strategies for the oil and gas industry to cope in a low price environment

Marc Hammerson
Marc Hammerson and Nicholas Antonas
13 January 2017 - 0 comments



A significant development occurred in the UK’s oil & gas industry on 1 October 2016. The Oil & Gas Authority (OGA), the industry regulator, was converted from an executive agency of the government to a company with the Secretary of State for Business Energy and Industrial Strategy as its sole shareholder. 

It marks the final step in the creation of an independent regulator. This change coincided with a number of OGA policy and strategy papers intended to promote efficient operating standards in the UK continental shelf (UKCS). The central theme of these papers, as well as the creation and existence of the OGA, is to keep the UKCS competitive and sustainable as a mature basin operating in a low oil price environment. 

Shortly following the OGA’s incorporation, a number of additional strategy papers were published designed to encourage better behaviours among UK industry participants. This blog briefly describes the creation of the OGA and policies introduced since incorporation.

The Mindful Lawyer

Linda S  Spedding
Linda S Spedding
13 December 2016 - 0 comments

The Mindful Lawyer and Legal Profession 

Dr Linda Spedding

Life’s pressures, pace and resilience 

The life of the legal professional has changed hugely in recent years: indeed, life has speeded up in many respects through manifold pressures. Resilience is vital in order to enjoy a happy, healthy experience through the life cycle of the individual career, whether one opts for private practice, in-house work, academia, the voluntary or non-profit area or the public sector. The pace has major impacts on one’s health and ability to fulfil all of the requirements and timelines that are continuously driving the practitioner. In addition, the level and extent of client demands, regulatory requirements and administrative overload are often overwhelming. In order to withstand these, inner peace and strength are needed as a priority. An individual structure that honours and includes time to be, to think, to relax, to restore and to thrive is of considerable assistance.

Assets family firms can leverage to make successful acquisitions

Richard L Narva
Richard L Narva
8 December 2016 - 0 comments

Assets family firms can leverage to make successful acquisitions

In the 35 years that I have been advising family controlled companies, now, more than ever, these enterprises are growing by acquisition. Many corporate finance professionals, and the lawyers who advise them, view family firms as inventory for their deals, and low-hanging fruit at that. In my judgement, this view is both obsolete and dangerously myopic to private equity partners and business development executives as strategic players in the acquisition market.

In the first instance, most of the low-hanging [family business] fruit that did exist has been harvested by the ever-increasing tide of private equity firms. Fifteen years ago, in the US, there used to be hundreds of such firms; now there are thousands. But more significantly for the future of the private equity industry in its never-ending search for deal targets, what is left of the family business sector in the US is largely too small and too weak to be worth acquiring, or too strong and too sophisticated to be purchased at a bargain.

That is to say that family controlled companies that used to be targets for acquisition are now competitors of both financial and strategic buyers. And, most intriguing, is the entry into the acquisition business of single-family offices with both substantial liquidity and deep expertise in the world of family enterprise. Both family controlled operating companies and single-family offices bring to the business of acquisition assets that non-family controlled buyers can’t match.

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Find out how the recast European Insolvency Regulation is impacting distressed investing in Europe

James  Bell
James Bell and Douglas Hawthorn
30 November 2016 - 0 comments

The recast European Insolvency Regulation – impact on distressed debt investors

What's happening? 

In 2002, the European Insolvency Regulation (EIR) introduced a regime governing the administration of insolvent corporates or individuals which operate in more than one member state of the European Union (EU). A "recast EIR" will apply to insolvency proceedings commenced on or after 26 June 2017. 

Why are the EIRs important? 

The EIRs ensure recognition, without further formality, of insolvency proceedings throughout the EU (except Denmark) and determine the law applicable to such proceedings. They apply only where the debtor's centre of main interests (COMI) is situated in a member state (other than Denmark) and do not apply to insolvency proceedings on foot in other jurisdictions. The EIRs are only binding on participating member states and so will be of limited practical use where assets are situated outside the EU. The EIRs envisage there being one set of main insolvency proceedings, with the possibility of multiple territorial (or secondary) insolvency proceedings. 

The key ingredient for creating and sustaining law firm profitability

Anthony J Rhem
Anthony J Rhem
14 November 2016 - 0 comments

Creating a Client Advantage - The Practice of Knowledge Management in Law Firms

Legal knowledge management is the driving force within law firms across the globe. The recent International Bar Association (IBA) conference in Washington DC attracted over 6000 legal professionals from around the world and Knowledge Management (KM) was prominently featured at the conference. In an article by Ron Friedmann of Fireman & Company in Bloomberg Law he indicates that legal knowledge management is on the rise as law firms realize that KM increases a lawyer’s productivity (Friedmann, 2016). This increase in productivity leads to delivering better value to clients. Ron Friedmann also indicates that The 2016 Citi-Hildebrandt client advisory expects “to see more focus on knowledge management” and The 2015 Altman Weil law firm report finds that 68% of firms with 250+ lawyers have incorporated KM initiatives to improve the firm’s efficiency (Friedmann, 2016).

In a Forbes 2014 article Micah Solomon indicates that creating true client loyalty is one of the most powerful and reliable ways to build a strategic, sustainable advantage for the law practice and that truly loyal clients are less price sensitive, and are less likely to be enticed by competitive entreaties from the firm across the street or across the continent (Solomon, 2014). Knowledge Management plays a key role in ensuring a high level of client support. KM staff operate smoothly between lawyers and a range of operational functions; ideally situated to increase intra-firm collaboration, communication, and understanding. Some KM programs have worked on operations for some time, but business conditions are now ripe for more extensive applications of KM to firm operations; arguably critical to keeping operational teams relevant and law firms profitable (Solomon, 2014).

Client support specifically focuses on dramatically improving the client experience. It is the expectation of all clients that legal professionals and law firms will provide high quality legal services and it’s that promise and demonstration of high quality legal services that are the intangibles that will set the firm apart. Some of the benefits KM has for legal professionals as it pertains to servicing clients are:

Wealth cannot pass three generations: Can family offices in Asia defy all an old aphorism?

Nadav  Lehavy
Nadav Lehavy and Andrew White
28 October 2016 - 0 comments

2016 represents a landmark year for Sandaire as we celebrate the 20th anniversary of our establishment, initially as a single family office (SFO), and later as a multi-family office (MFO). Having been one of the pioneers of the MFO model in the UK, we have seen the sector evolve significantly to establish itself as a well-defined niche in the ultra-high net worth (UHNW) space in its own right. We see many parallels between this early UK market of the late 1990’s, where the MFO model was poorly-defined and even less well understood by clients, and the current market in Asia, which remains dominated by private banks, with very few full-scale, independent and institutional-sized MFOs. It is clear that the whole UHNW market in Asia is changing rapidly and it was, for this reason, we decided to establish our first office outside the UK in Singapore in 2012. 

Unlike in Europe and the US, where substantive industrial and economic expansion occurred during the 18th and 19th centuries, bringing with it previously unimagined riches for many, most families in Asia did not begin to accumulate their wealth until the rebuilding period after World War II. As of today, the ‘wealth creators’ (the first and second generations) still control a large proportion of the family capital in the region, meaning relatively fewer families in Asia have begun the process of establishing SFOs (or engaging with MFOs) for the specific purpose of capital preservation and generational succession, (which we believe are the primary objectives of a family office). This is clearly changing, however, and many families are searching for ways to defy the old Chinese aphorism, that “wealth does not pass three generations”. We believe MFOs are uniquely placed to help families in Asia achieve this. The current options for UHNW families can be loosely grouped into three areas: 

Private banks are by far the most common solution that wealthy families have sought to manage their assets in Asia, and their success has relied upon several factors - namely, a broad range of proprietary products and services, deep resources and the provision of credit (for speculation or for corporate requirements). However, we believe the current practice for a family to hold accounts with multiple institutions, whether for diversification, secrecy, lack of trust, etc., to be inefficient and generally sub-optimal. 

It is also not difficult to see that the interests of the client and those of the banker (who is incentivised to maximise revenue from the client) are misaligned. We believe our independence and transparent service offering are the crucial differentiators between family offices and private banks. 

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Better carrots for partner compensation strategies

Norman Clark
Norman Clark
30 September 2016 - 0 comments

Looking for a Better Carrot

Compensation is a traditional “carrot” in the “carrot and stick” approach that many law firms use to motivate their partners’ financial performance. Increasingly, law firms are discovering that an “eat what you kill” (EWYK) compensation plan, in which a partner’s remuneration is determined entirely or predominantly one’s own fee production, is no more motivating than a cup of espresso coffee. It creates a buzz that lasts a little while and then quickly wears off.

This is why traditional “carrot and stick” thinking about partner compensation seldom produces long-term results in law firms. Some partners are not especially attracted by the taste of the carrot, and most of them learned long ago not to fear the stick.

“Eat what you kill” is not all bad

How to turn 'bad news' into a great conversation

Alison Nolan
Alison Nolan
26 August 2016 - 0 comments

Have you ever had to give difficult feedback to a talented team member you want to motivate and inspire?  Most people encounter that situation from time to time in their working lives.  There are two possible risks:   you soft-pedal the feedback, so the recipient doesn't really hear or understand it;  or you crush the confidence of someone who has real potential to succeed.  There is a third way, so here are some tips for turning bad news into a conversation that leaves the recipient motivated to improve, and your working relationship even stronger.  There are many ways for this conversation to go wrong, but the more of the following you put into practice, the better the outcome is likely to be:

1    Make sure the recipient feels valued as a person.  Feedback from associates tells us that they appreciate it when partners and senior lawyers take the time to get to know them as individuals, and to listen to and respect their opinion.  If you have created a relationship of mutual respect and interest, you have a good foundation for helping people perform at their best.  As part of the feedback conversation, make sure you mention something you appreciate about them – make it sincere, specific and succinct.  It can be as simple as 'I really appreciate how hard you have been working' or 'I've noticed how willing you are to offer your help to others on the team'.  

2    Let them know that you have some feedback you believe will help them improve their skills or performance.  Feedback given with positive intent is always more effective than criticism that comes from a place of annoyance or lack of respect.  Notice your own feelings and manage them well.  Introduce the feedback as being intended to help them succeed.

3    Make your feedback succinct and crystal clear.  Work out in advance how you're going to give the feedback and stick to it.  Give the recipient time to digest what you've said.  Make sure the feedback is about the action or behaviour that you want them to change, not about them as a person.  

Six rules to determine the winners and losers in post-Brexit Britain

Stuart Weinstein
Stuart Weinstein
31 July 2016 - 0 comments

Political Lessons for Legal Risk Managers From the Brexit Vote

It would not be an understatement to say that the outcome of the Brexit vote surprised many legal risk managers worldwide. 

1.    Keep calm and carry on
Legal risk managers should not make any bold or brash decisions concerning operations or investment in the United Kingdom until things calm down and there is a clear political, economic and social understanding of what the true impact of Brexit will be for both the United Kingdom and the European Union as a whole.   

2.    It ain’t over til its over
There will be tough negotiations ahead between the United Kingdom and the European Union 27 remaining Member States to work out the divorce terms.  This may take years to resolve.  It is clear that the stumbling block is that there can be no access to the Single Market by the United Kingdom without freedom of movement for European Union workers.   However, the cut from this hard and fast line will hurt French farmers and German automobile manufacturers as much as it does British bankers and airlines.   
However, until Article 50 of the Treaty on the European Union (“TEU”) is triggered by the United Kingdom, the divorce is not a done deal.  While the UK Government suggests that the Prime Minister has the authority to trigger Article 50 of TEU, it is clear that Parliament would have to pass an act repealing the European Communities Act 1972.  The United Kingdom courts would then have to give effect to and follow such a major constitutional act.  The question to be asked remains what aspects of European law will remain incorporated into United Kingdom law (England and Wales, Scotland and Northern Ireland) after a Brexit?  Nobody knows.  

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The 10 most important changes to European Union Trade Mark law

Mark Holah
Mark Holah and Patricia Collis
16 June 2016 - 0 comments

European Union Trade Mark law: 10 key changes you should know about

On 23 March 2016 Regulation (EU) No. 2015/2424 entered into force, and with it the most significant changes to EUTM law since the unitary EU-wide trade mark system was introduced back in 1996. 

Here we outline the 10 most important changes that all companies should be aware of:

1.    Name Changes: the name of the unitary EU-wide trade mark has changed from the Community Trade Mark (CTM) to the European Union Trade mark (EUTM).  In addition, the name of the EUTM Registry has changed from the Office of Harmonisation in the Internal Market (OHIM) to the European Intellectual Property Office (EUIPO). 

Does hedging play an integral part in mitigating the loss of falling oil prices?

Iain Sharp
Iain Sharp
4 May 2016 - 0 comments

Mitigation following a breach of contract – how far does the duty extend?

The rout in commodity prices continues to impact nations and stocks across the globe.  Already this year the price of oil has dipped below US$30 a barrel, with a seemingly unrelenting oversupply of crude and markets preparing for the return of Iran post-sanctions.  Sadly, falling prices often result in contract re-negotiations or default, leading to claims and innocent parties with goods on their hands and a difficult search for a willing buyer prepared to pay a reasonable price.

Following a breach of contract, the innocent party has a duty to mitigate the loss it has suffered.   However, failure to mitigate loss may prevent that party from recovering damages for avoidable loss.  A standard defence which the defaulting party often invokes to reduce the damages payable is that the innocent party has failed to act reasonably to mitigate its loss.  The burden of proving a failure to mitigate falls, however, on the defaulting party.

As one might imagine, the courts are generally sympathetic to efforts made by an innocent party seeking to deal with a breach of contract. The requirement to take 'reasonable steps' to mitigate loss is not a particularly high standard.  This so-called ‘duty’ requires reasonable steps to be taken to limit the losses that are incurred (and also to avoid incurring unnecessary expenditure in seeking to remedy the breach).  An innocent party need not, however, take unusual steps that would be outside the normal course of its business, or even incur undue costs. Reasonable costs of mitigation incurred by the innocent party will generally be recoverable from the defaulting party.

Are we about to see an end to aggressive “schemes forum shopping”?

Alan Tilley
Alan Tilley
29 April 2016 - 0 comments

London schemes industry set back! Are we about to see an end to aggressive “schemes forum shopping”?

An extraordinary coincidence of timing at the excellent R3 Insol Europe International Restructuring Conference in London today. Global Turnaround Editor, John Willcock’s informative market update featured “London’s scheme Industry keeps on rolling” as a keynote topic. He pointed out the recent COMI shift objections in the Codere and Indah Kiat cases to what the court described in Codere as “… an extreme form of forum shopping” and “grabbing someone else’s debt just to get rid of it”. But just two days before reports had emerged that a German court, in ruling on bond holder claims written under Austrian law, whilst rejecting a German insolvency filing, had stated that Scholtz’s COMI was in Germany; this whilst Scholtz’s advisers have been active in migrating certain management functions to UK to establish a UK COMI and sufficient connection to proceed with an English scheme of arrangement to restructure Scholtz’s debt. 

Whilst scrutiny of the detail of the judgment is awaited it is interesting that apparently “contrived” aggressive forum shopping is being seriously questioned by courts in both England and Germany. In a further conference session on developments from the European Union the concept of “COMI at the transaction date” was mentioned. Maybe this will appear in a forthcoming directive and further undermine post distress COMI migration. This would certainly be too late to affect the Scholtz restructuring but what is evident is that courts are alert to spurious forms of forum shopping and are taking a more demanding look at the underlying reality. 

In the short term, the advisers of Scholtz may have to go back to the drawing board unless they can convince an English Court judge to take a contrary view to his German counterpart. Now that would be interesting!

A new approach to business failure and insolvency

Alan Tilley
Alan Tilley
12 April 2016 - 0 comments

Will the EU Regulation’s March 2014 recommendation to adopt more flexible pre-insolvency processes affect the UK?

In March 2014 the European Commission published its recommendation on “a new approach to business failure and insolvency” which set out minimum standards for a restructuring framework in each member state. The broad market reaction in the UK was mixed ranging from supportive from those sectors favouring facilitation of consensual restructuring ahead of formal process to “it ain’t broke don’t fix it”, particularly from the insolvency profession. The latter view was the dominant view in the UK Government response of March 2015 which followed a brief industry consultation. It cited the widely held belief that the UK system incorporating Schemes of Arrangement, CVA’s and pre-pack administrations was both flexible and efficient as demonstrated by the general direction of forum shopping to London. There seemed little government appetite for legislation change.

Some interested parties did take a different view, pointing to the gap between consensual restructuring where sufficient liquidity kept creditors at bay whilst solutions were negotiated (sometimes called Consensual Creditors’ Compositions), and any process signalling near insolvent distress to the customer and supplier constituency which damaged goodwill and therefore both value and recovery prospects. There were calls for a properly defined automatic stay, consistent methodology and independence in valuations, and post-petition super priority financing. Some influential parties pointed out the better recoveries for consensual restructuring but also acknowledging that once in formal process, the UK system with decisions undertaken by more commercially minded insolvency practitioners than the generally constrained Courts in continental Europe was fast, more predictable and more efficient than the continental counterparts.

Fast forward 12 months and we now see the EU is “assessing the state of play” to see whether further measures to strengthen the move to facilitate restructurings at an earlier stage and to allow debtors to restructure without recourse to formal procedures are required. A multi-jurisdictional panel has been established from across the spectrum of the restructuring professions. In short, are we going to see an EU Directive which could mandate the UK to close the gap between consensual creditors’ compositions and CVA’s?