Magic Circle Firm Lands Key Mandate as British Steel Collapses
The steel giant entered insolvency earlier today, leaving 5,000 staff at risk of redundancy.
May 22, 2019 at 08:16 AM
2 minute read
Clifford Chance has picked up a key role for the government on the insolvency of steel products business British Steel, which today (May 22) fell into administration.
The Magic Circle firm is advising the official receiver – deployed by the government's Insolvency Service – who has taken over management of the company, with Big Four accountancy firm EY drafted in to assist the official receiver as special managers of the process.
CC restructuring partners Philip Hertz and Iain White are leading for the firm.
British Steel was founded in 2016 when investment group Greybull Capital bought the Long Products Europe business of Tata Steel. It owns steelmaking facilities across the U.K. and France, and supplies steel products to manufacturing sites around the world.
The company employs about 4,100 people in the U.K. and a further 900 in other countries, according to an EY statement.
Before it entered insolvency, British Steel turned to CMS to advise it on its restructuring negotiations with the government and other key stakeholders. Corporate partner Gareth Saynor and restructuring partner Glen Flannery led for the City firm.
With the administration process underway, British Steel is also engaged in a dispute with Zurich Insurance and other insurers over a £30 million insurance claim which, if successful, could go some way towards saving the company, according to a person at insurance governance firm Mactavish, which is advising British Steel on the dispute.
In a statement, Mactavish said the claim relates to an incident in June 2017, in which a blast furnace at the steel company's Scunthorpe premises was damaged, requiring it to be shut down for several weeks.
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