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A series of high profile wins for Allen & Overy’s UK contentious restructuring practice

Author
Katrina Buckley

Partner

London

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Field Ian
Ian Field

Partner

London

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Oliver Rule

Counsel

London

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Image of Nick Lister
Nick Lister

Partner

London

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Williams Victoria
Victoria Williams

Senior Associate

London

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04 July 2018

A&O’s top tier UK financial disputes team has been making its mark in insolvency litigation in the last six months with a string of successes. A common theme for each of these cases was the speed at which complex legal issues were resolved to the benefit of clients. 

Marc Florent, who leads A&O’s UK insolvency litigation practice, said “Our contentious restructuring practice is a long standing one and has enjoyed some high profile successes over the years for numerous types of clients including banks, funds, officeholders and corporate trustees. Three back-to-back successes in the last six months have demonstrated the team’s versatility, ability to work collaboratively across practice groups, and to act swiftly and decisively.”

Heis v FSCS

At the start of June 2018, A&O persuaded the Court of Appeal unanimously to stop the MF Global UK CVA from coming into effect, saving the creditors it represented (including Attestor Capital LLP) £64 million. The case turned on the emergence of a large unanticipated claim which upset the economics of the deal. 

It serves as a reminder that, when negotiating such a deal, the risk of unknown claims needs to be considered and clearly allocated. Katrina Buckley, who led the team with Marc Florent working alongside Oliver Rule, Victoria Williams and Jon Turnbull, said: “This was a really important win for our client and a testament to the efforts of our team. The case was conducted at lightning speed, with the Court of Appeal judgment coming just 17 days after the initial Court decision and only 11 weeks after the MF Global Administrators put the question before the Court.”  

Citibank, N.A. v Oceanwood and others

In January 2018, a novel construction advanced by certain bondholders of a market standard clause, raising questions of New York and English law, threatened to scupper the restructuring and sale of Norske Skog, a Norwegian paper conglomerate which was in severe financial difficulty. Through swift action, A&O acting for the trustee, Citibank, managed to get the matter heard and resolved before the English Courts in just ten weeks, successfully resisting attempts by the relevant bondholders to have the issue determined according to a much lengthier timetable in New York (which would have been fatal to the sale of Norske). The sale completed and the company was saved. 

The case demonstrates the importance of seizing a jurisdiction in which proceedings can be issued and heard expeditiously. Marc Florent, Victoria Williams and Oliver Rule led on the litigation side, together with Ian Field and Nick Lister who advised on the restructuring of Norske.

The administration of Phones 4U Limited

In January 2018, A&O (acting for the administrators of Phones 4U) obtained summary judgment against a mobile network operator, defeating a £200 million counterclaim against Phones 4U for repudiatory breach of contract. The judgment led to a substantial payment to the Phones 4U estate in settlement of historic commission payments – a swift resolution of a matter which could otherwise have resulted in years of protracted litigation and considerably delayed payments to creditors of Phones 4U.

The judgment is an important legal precedent as the court examined from first principles the necessary ingredients required to constitute the cause of action for repudiatory breach. It also provides valuable guidance as to the circumstances where the exercise of a contractual termination right will and will not preclude a subsequent claim for damages for loss of bargain. The team led by Marc Florent included Mark Sterling, Victoria Williams and Jon Turnbull.