Olswang and Linklaters criticised by MPs for 'cursory checks' on BHS sale
MPs lay the blame for the collapse of the high street stalwart squarely at the feet of Sir Philip Green
July 25, 2016 at 07:45 AM
3 minute read
Olswang and Linklaters have been criticised for the "cursory nature" of their checks into Dominic Chappell, the director of Retail Acquisitions Limited (RAL), which took over BHS last year prior to its collapse. In the Parliamentary Select Committee report into the collapse of the retailer, the firms were criticised for the checks they carried out into Chappell, a bankrupt with no retail background.
The report, released today (25 July), states that firms were there to advise and "not to provide an expensive badge of legitimacy to people who would otherwise be bereft of credibility", which it says is what had happened.
The report adds: "In the case of BHS, it appears that advisory firms either did not consider the reputational risk or demonstrated a remarkable level of 'group-think' in relying solely on each other's presence."
It also cites a handwritten note from a call between Linklaters and Olswang regarding Chappell as evidence of the "cursory nature" of the checks into his background as a business owner.
While it praises Olswang's due diligence into BHS, describing it as "detailed and rigorous", it adds: "Grant Thornton and Olswang were increasingly aware of RAL's manifold weaknesses as purchasers of BHS. They were nonetheless content to take generous fees and lend both their names and their reputations to the deal."
The report also criticises Olswang and Grant Thornton's decision to cite legal privilege, which had not been waived by Chappell, as a reason for not disclosing some information to the committee. It says that while firms' ability to provide confidential advice was important in a matter of clear public interest, such as BHS's collapse, disclosure of confidential or privileged information was necessary.
It adds that the firm adopted "a very wide interpretation of confidentiality", which included sending substitute witnesses to evidence sessions and refusing to provide details of fees earnt. Olswang's general counsel Stephen Hermer appeared before MPs on 25 May, when corporate partner David Roberts had been scheduled to appear.
It concludes: "We regret that Olswang and Grant Thornton sheltered behind these duties [of confidentiality and privilege] when their interests – and that of the public – would have been better served by full and frank disclosure to legitimate parliamentary scrutiny."
Speaking to Legal Week following a hearing on 23 May, Frank Field, chair of the Work and Pensions Select Committee, expressed his frustration at what he saw as a lack of detail in the partners' responses to questions.
Field said: "I just think it's too easy to claim privilege. It's just laziness and a cover-up."
The report laid the blame for the retailer's collapse squarely at the feet of Sir Philip Green.
Field said: "One person, and one person alone, is really responsible for the BHS disaster. While Sir Philip Green signposted blame to every known player, the final responsibility for up to 11,000 job losses and a gigantic pension fund hole is his. His reputation as the king of retail lies in the ruins of BHS."
Olswang and Linklaters declined to comment.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFreshfields, MoFo Act on $1.8B TOPPAN Deal As Japan's US Buying Spree Continues
Kirkland Steers Paris-based Antin in ‘Year’s Biggest’ Infrastructure Fund Closing, at €10.2B
3 minute readECJ Ruling Upholds German Ban on Pure Private Equity Investment in Law Firms
4 minute readTrending Stories
- 1Call for Nominations: Elite Trial Lawyers 2025
- 2Senate Judiciary Dems Release Report on Supreme Court Ethics
- 3Senate Confirms Last 2 of Biden's California Judicial Nominees
- 4Morrison & Foerster Doles Out Year-End and Special Bonuses, Raises Base Compensation for Associates
- 5Tom Girardi to Surrender to Federal Authorities on Jan. 7
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250