Boies, Schiller & Flexner in London
Questions for Natasha Harrison, the managing partner of Boies, Schiller & Flexner’s first overseas office.
What was the thinking on opening an office in London?
It was client-led. Most of our core clients have an international presence, and London is one of the world’s most important financial and legal centers. Litigation is increasingly international, and an office in London helps us to better serve our clients, to deepen our existing relationships, and to create new opportunities for the Firm.
What is the benefit for clients and future clients?
We provide a seamless service on cross-border litigation and investigations by providing best-in-class lawyers in London, New York, and Washington. The opportunities and issues facing our clients are rarely confined to one jurisdiction, and a closely knit cross-border team can deliver not just in the U.S. but also beyond. London is the gateway to Europe and to Asia, and we have extensive experience building the legal strategy and coordinating complex international litigation with local law firms across the globe.
How are we positioning ourselves?
We are building an office founded on the key principles developed in the U.S.: litigation-focused and staffed with the most creative and talented lawyers; maintaining the core client strategy by both extending existing client relationships to Europe and building new key relationships; and, of course, winning our cases.
What is the biggest case you have worked on in your career?
There are a number, but two really stand out. The first is Elektrim, a Polish telecommunications company, where I acted for holders of €525 million bonds. The company started breaching covenants and this triggered eight years of litigation: first against the Trustee for refusing to declare an event of default and then for refusing to accelerate without the benefit of a €1 billion indemnity (we took that to the Supreme Court and won, clarifying the law), then against the Issuer and its parent for the amounts due under the bonds. We litigated all over Europe (Poland, Germany – wherever we could find an asset) as well as in the U.S. and ultimately recovered the full amount due under the bonds together with significant default interest. We then went for the equity kicker and obtained a further nine-figure judgment – paid to our clients as part of a final settlement.
And the second one?
Iceland. As part of its response to the financial crisis, the Icelandic government retroactively prioritized depositors over bondholders. I ran a group of 90 bondholders of the three largest banks, holding bonds with a total face value of €20 billion. It involved issues of human rights – do hedge funds have them? – and the steps a state can legitimately take when faced with a financial crisis to expropriate property without compensation.
What is your take-away from that case?
Iceland is just one example post 2008 of state intervention into the banking sector and the “bailing in” of subordinated debt holders. We have seen similar steps being taken across Europe (e.g., Britain, Ireland, Greece) in response to the financial crisis, and more recently being threatened in Austria and Portugal. Any expropriation of property must be compensated, and any change to the law to give effect to the expropriation must be proportionate. The Iceland case took place against a highly politicized backdrop, with the British and Dutch governments also being closely involved. It reminded me that you never litigate in a vacuum and it is important to have a deep understanding of the culture, economics, and politics of the country in which you are litigating.
How do you see the outlook for financial litigation?
Busy, but the emphasis will shift as the key cases following the 2008 crisis become statute-barred. The significant increase of regulation of financial institutions following the financial crisis, combined with active cooperation between and among regulators in various jurisdictions, means that this will be an important focus for our clients, and litigation will undoubtedly flow from the increase in regulatory activity.
For investment funds, we will continue to see inter-creditor disputes as opportunities are exploited in finance documents; an increase in the use of schemes of arrangement as the English court continues to extend its long-arm jurisdiction and associated litigation over defined classes of creditors; challenges to the “white list” concept in debt trades, where sponsors/borrowers are trying to block secondary hedge fund investors from elevating and becoming lenders of record; and continued litigation in the sovereign debt markets. We are also likely to see challenges to steps taken by states intervening in the banking sector and bailing in subordinated debt holders.
How big is the London office?
We’re fully operational with a core group of lawyers, and by the end of the year we expect to hit double figures.
You were a London partner at another U.S. firm. What attracted you to Boies, Schiller & Flexner?
Shared values, brilliant lawyers, and the opportunity to build something with one of the best in the business.