Simmons advises on first Enron sell-off
Legal Week reports
February 13, 2002 at 07:03 PM
2 minute read
Simmons & Simmons has advised Sempra Energy Trading on its £103m acquisition of Enron Metals in what is expected to be the first of a raft of sell-offs following the collapse of the energy giant.
The deal proved time-consuming and complex for the firms involved and a further boost for Simmons' strong reputation for contentious energy work. Enron administrator Dipankar Ghosh is said to have described it as the most complex transaction "he had done in 25 years".
Head of corporate Stuart Evans and partner Jonathan Melrose led for Simmons, with Linklaters partner John Goodwin on the other side acting for Enron's administrator, PricewaterhouseCoopers.
Linklaters had a strong relationship with Enron and the firm is widely expected to be involved in a number of future transactions involving the company on behalf of the administrator.
As Enron Metals was bought from Enron in administration, it meant that no representations could be made to prove the seller owned the shares. The situation was exacerbated when it was found that share certificates were also missing.
The consideration for the deal was therefore paid into a special account. It will remain there until it is proved that the assets are free from any third party interests. To assist in finding other interests the administrator put advertisements out in newspapers.
Evans said the deal was further complicated "because of the cross-relationship between the other Enron businesses".
He said: "We had to protect it from predatory attacks from other parties."
Enron only acquired the business in 2000, which was at the time the largest division of the former Metallgesellschaft Limited metals broking and market making business.
Sempra is a regular client of Simmons, which advised it through Melrose in establishing its energy trading operations in Europe. Sempra is based in Stamford, Connecticut. It is a subsidiary of Energy Global Enterprises.
Other energy clients of Simmons, which had previously also advised Enron, include TotalFinaElf and Offsets Group.
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