Shearman cements Berkeley ties
Leading US firm strengthens ties to Berkeley on controversial restructuring and cash return to shareholders
September 08, 2004 at 08:03 PM
2 minute read
Shearman & Sterling has strengthened its relationship with Berkeley Group after acting on the house builder's controversial restructuring and cash return to shareholders.
The US firm was the only legal adviser on the deal which sees up to £1.4bn returned to shareholders over six years, with the company moving out of house building to focus on urban regeneration projects.
The deal, which must be approved by shareholders at an extraordinary general meeting later this month, has attracted controversy due to the reward it gives to management.
The company's four senior managers take 15% of the company – effectively giving them a multi-million pound pay out – as part of a long-term incentive programme put in place by Shearman.
The Association of British Insurers has already issued a 'red top' warning – its most serious corporate governance alert – due to the size of the pay out.
"The point is that shareholders are seeing the existing management stay in place for six to eight years," said corporate partner Adrian Knight, who led the Shearman team.
Knight previously acted for Berkeley while at his former firm, Ashurst, which he left five years ago. Last year he brought the client over to Shearman to act on the £450m partial disposal of one of the company's subsidiaries.
Shearman acted on all aspects of the current shake-up, one of its most significant UK instructions this year, with the firm fielding corporate, tax, litigation and share scheme and employment teams from its City arm.
"One thing that distinguishes us from other US law firms in London is that we were able to do this sort of transaction and keep it entirely confidential and private within one firm," Knight said. "Other US firms would have had to subcontract and bring in one or two other firms to assist them and that would not have worked in this situation."
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