Olswang has been accused of being the "unacceptable face of capitalism" in a parliamentary report on the collapse of BHS.
The media specialist advised Retail Acquisitions Limited on its £1 purchase of BHS from Sir-but-perhaps-not-for-much-longer Philip Green. BHS collapsed in May, leaving 11,000 staff facing redundancy, a £531 million hole in its pension pot, and three massive yachts for Sir-not-for-long-Philip. The report by the Work and Pensions and Business, Innovations and Skills and Enterprise and More Innovation and Further Skills Committees has drubbed the "large cast of directors, advisers, and hangers-on" for having "enriched themselves off the back of BHS".
Concluding that they were "all culpable", it branded the deal the "unacceptable face of capitalism". The report claimed that Olswang was "preoccupied" with how its "generous" fees would be paid by RAL boss Dominic Chappell, and proceeded "with great haste" to complete the deal so that its client would have some assets to meet its bill. But kind of ignoring the basic concept that lawyers provide legal advice to clients, rather than actually deciding who buys what, and thus making Olswang in reality perhaps a lip, or at worst an eyebrow, on the unacceptable face of Sir-Not-Sir Philip Green.
Linklaters, which acted for Green's Arcadia group on the sale, did not escape unscathed either. Accused along with Olswang of "a remarkable level of 'group-think'", the report said the firms relied "solely on each other's presence" to justify working on the flawed deal. The report included a revealing Linklaters telephone note in which an Olswang partner, David Roberts, reassured it that serial bankrupt Chappell was a really solid bloke he'd known for ages:
However, the report did in the end accept that, while it's a bit boring, both firms "ultimately did not need to concern themselves with the material consequences of the deal, provided that their advice was accurate and their terms of engagement fulfilled". And it noted that Olswang specifically warned that the post-sale pension plan was unrealistic. So basically, the lawyers did what lawyers are meant to do but, in the same way that it's probably unfair but still good fun to blame the Welsh for Brexit, it was definitely probably Olswang's fault anyway.
And so the MPs bent themselves into a pretzel trying to demonise the law firms' actions, even blasting Olswang for refusing to break its duty of client confidentiality. It argued that Olswang "sheltered behind these duties when their interests - and that of the public - would have been better served by full and frank disclosure to legitimate parliamentary scrutiny". Kind of ignoring that whole old fashioned common law thing.
Coincidentally, Olswang is sponsoring this year's "Retail Week Power List", in which Green is listed as one of the year's biggest fallers. For some reason, the firm's press release fails to mention its landmark work on BHS.
RollOnFriday asked both firms if they were going to return their tainted fees to the collapsed retailer's pension pot, but neither replied.
Tip Off ROF
The media specialist advised Retail Acquisitions Limited on its £1 purchase of BHS from Sir-but-perhaps-not-for-much-longer Philip Green. BHS collapsed in May, leaving 11,000 staff facing redundancy, a £531 million hole in its pension pot, and three massive yachts for Sir-not-for-long-Philip. The report by the Work and Pensions and Business, Innovations and Skills and Enterprise and More Innovation and Further Skills Committees has drubbed the "large cast of directors, advisers, and hangers-on" for having "enriched themselves off the back of BHS".
Concluding that they were "all culpable", it branded the deal the "unacceptable face of capitalism". The report claimed that Olswang was "preoccupied" with how its "generous" fees would be paid by RAL boss Dominic Chappell, and proceeded "with great haste" to complete the deal so that its client would have some assets to meet its bill. But kind of ignoring the basic concept that lawyers provide legal advice to clients, rather than actually deciding who buys what, and thus making Olswang in reality perhaps a lip, or at worst an eyebrow, on the unacceptable face of Sir-Not-Sir Philip Green.
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"Goin' to the Chappell And we're gonna get pa-a-aid" |
Linklaters, which acted for Green's Arcadia group on the sale, did not escape unscathed either. Accused along with Olswang of "a remarkable level of 'group-think'", the report said the firms relied "solely on each other's presence" to justify working on the flawed deal. The report included a revealing Linklaters telephone note in which an Olswang partner, David Roberts, reassured it that serial bankrupt Chappell was a really solid bloke he'd known for ages:
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"He has still got my mower though." |
However, the report did in the end accept that, while it's a bit boring, both firms "ultimately did not need to concern themselves with the material consequences of the deal, provided that their advice was accurate and their terms of engagement fulfilled". And it noted that Olswang specifically warned that the post-sale pension plan was unrealistic. So basically, the lawyers did what lawyers are meant to do but, in the same way that it's probably unfair but still good fun to blame the Welsh for Brexit, it was definitely probably Olswang's fault anyway.
And so the MPs bent themselves into a pretzel trying to demonise the law firms' actions, even blasting Olswang for refusing to break its duty of client confidentiality. It argued that Olswang "sheltered behind these duties when their interests - and that of the public - would have been better served by full and frank disclosure to legitimate parliamentary scrutiny". Kind of ignoring that whole old fashioned common law thing.
Coincidentally, Olswang is sponsoring this year's "Retail Week Power List", in which Green is listed as one of the year's biggest fallers. For some reason, the firm's press release fails to mention its landmark work on BHS.
RollOnFriday asked both firms if they were going to return their tainted fees to the collapsed retailer's pension pot, but neither replied.
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The parent company was then loaded with debt and the bulk of the cash was sent, via dividends, to Tina in Monaco. Precious little went into BHS, which continued to struggle.
Green had learnt the trick here earlier in the 1990s, working alongside the Barclay Brothers, who had used a similar mechanism to (legally) siphon many millions out of the Sears shoe shop chain before it sank without trace.
The dowdy BHS didn’t really matter too much to Green, since his friends at HBOS (RIP) had lent him enough to buy a solid retailing business with real prospects in the shape of Arcadia/Top Shop. Green was able to party hard with the likes of Kate Moss or spend time on one of his super-yachts.
Now, it can be argued that this is simply efficient capitalism in practice. BHS has been in a vegetative state for 20 years: leveraging up the near-corpse allowed the Greens to pump money into other job-creating things such as the crafting of a solid gold Monopoly set, featuring Tina’s high street acquisitions.
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RAL was an SPV so any firm would be concerned about payment of its fees. I don't see how this is an issue.
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