LAWFUEL – The Legal Newswire – City law firms are gearing up for the aftershock of the credit crisis. They are preparing to advise investors who lost money and companies going bust as a result of funding problems.
Several disputes are already in the pipeline. Earlier this month, UK investors were contacted by a New York law firm about joining a £50m action against one of two Bear Stearns hedge funds that collapsed.
One source said: “There are definitely people who have over-reached themselves. Quite how far and how systematically remains to be seen. At the moment, there are just a lot of puzzled letters from investors.”
City law firm Herbert Smith has set up a taskforce bringing together its corporate recovery, restructuring, dispute and insolvency teams to prepare for the aftermath of the crisis. The taskforce meets on a weekly basis to consider how the market is coping and includes representatives from other teams, such as mergers and acquisitions, real estate and general corporate. The firm believes traditional trade buyers will have more chance to do deals now that the debt-driven private equity industry has stalled.
