40 The Lawyer | 18 July 2016 The Lawyer Awards Winners’ case studies

Akin Gump Strauss Hauer & Feld Restructuring team of the year SUBSTANCEPHOTOGRAPHY.COM

kin Gump’s award-winning team has making sure everything was followed through and Number of partners in the UK practice been at the heart of pivotal deals emanat- not brought into doubt,” says Russell. “It was also 11 A ing from debt bail-outs in Europe. More a massive project and case management exercise.” Total number of lawyers in the UK practice than 95 per cent of the London-based team’s work 25 comes from direct instructions and its practice Innovation Head of practice focuses on restructurings and debt or equity This was a unique case. Never before had Co-heads of financial restructuring in financings for troubled companies. The team has – a country with fewer than 350,000 inhabitants London, James Roome and Barry Russell experience restructuring complex corporate debt – experienced such a financial collapse. Its laws Client wins in the past six months and structured finance arrangements. were not well suited to facilitate a consensual Confidential As a result of the Icelandic banking collapse, restructuring of the failed estates, its practi- Glitnir, and Kaupthing were placed tioners were not familiar with international in winding-up proceedings. Under Icelandic law, restructurings of this magnitude, successive the only ways to exit such proceedings and distrib- governments were impacted significantly by the ute value to unsecured creditors are by “compo- collapse, and the economic issues presented by sition” (effectively, a consensual reorganisation) the proposed restructurings were unprecedented. or bankruptcy proceedings (a liquidation). Icelandic law did not provide any means for From the outset, Akin Gump’s team was closely creditors to interact meaningfully with the failed international restructurings. involved in the formation of the informal credi- bank estates. Akin Gump advocated and helped “Not only were you trying to craft these deals tors’ committees (ICCs) of the three and create the ICCs, which were supported by repre- within international restructuring norms, you had represented its clients on those committees. In sentatives of the government after its lobbying. to turn around and advocate changes to the legal that capacity, the firm analysed the impact of This facilitated an invaluable means of commu- system to allow the deals to happen,” says Russell. Iceland’s 2008 emergency banking legislation, nication with creditors over the past seven years. “We got to a point in this deal where I lost count which created a “new bank” for each failed bank “This process required many trips to Iceland of how many trips I took out there.” and, in each case, transferred domestic assets and over the years and extensive interaction with rep- Akin Gump lawyers were extensively involved liabilities in exchange for compensation. Akin resentatives in the central bank, the government, in devising the framework for voluntary “stability Gump’s team was closely involved in negotiating old bank estates, local counsel, local political contributions” – the negotiated alternative to the these complex compensation agreements. advisers and local economists,” says Russell. “In threatened stability tax. Russell adds: “It gives you After this initial phase, Akin Gump oversaw a some respects, although it wasn’t a sovereign a great feeling that what you have done has helped complex claims filing and dispute process, and led restructuring, you felt like you were effectively that economy turn around and come back.” challenges to the 2008 emergency banking legis- restructuring the economy, given the impact the lation in Iceland. A key issue at that time was to banks’ failures had on the local economy” Client relationships and key deals determine the priority to be given to certain The firm developed a multi-jurisdictional liti- The firm was first instructed in this matter in classes of creditors, including the UK government gation strategy to protect the interests of creditors October 2008, just after the banks’ collapse. Ini- and a number of UK local authorities. in the event that the Icelandic government took tially, its clients consisted of original institutional During the process, the team, led by London- hostile action targeting the assets of the failed investors in the debt of the three failed banks, but based partner Barry Russell, designed and put in bank estates. This strategy included devising novel the group quickly grew to include secondary place a co-ordinated cross-border strategy to pro- legal arguments under EU/EEA law, Icelandic law investors who purchased claims in those banks. tect the interests of creditors in the event that the and the laws of various other jurisdictions. consensual discussions failed. Litigation partner Akin Gump was at the forefront of structuring Judges’ comments Mark Dawkins devised the litigation strategy that the composition agreements, which had unprec- A number of this year’s award entries featured was a hugely important factor in influencing the edented scope under Icelandic law. This required Icelandic banks, but Akin Gump stood out. consensual outcome of the restructurings. in-depth knowledge of Icelandic legislation and a “This was a hugely impressive restructuring of This multi-dimensional matter required the fusion with international restructuring principles. three Icelandic banks by Akin Gump’s remarkable firm to develop a thorough understanding of the The firm’s restructuring team advocated suc- team in the face of uncertainty and Icelandic cap- business landscape, culture and political situation cessfully to make three extensive sets of legislative ital controls,” a judge says. “Their role in setting in Iceland. “Everything was poured into it, years changes to facilitate the compositions. This would up a structure and in successfully co-ordinating of understanding comparative legal systems and have been impossible without the team’s unique the diverse stakeholders is hugely impressive.” how restructurings are negotiated, as well as understanding of the relevant legislation (assisted Another judge says: “They had to learn the law building relationships of trust with people and by local counsel) and its extensive experience in and then teach the law. That is very impressive.”