Northern Rock has paid out more than 20 milion pounds ($40 million) to law firms and accountants over the course of its struggle for survival, it has emerged, with Freshfields Bruckhaus Deringer and Allen & Overy both in line for bumper paydays.
According to its latest annual report, published Monday, Northern Rock paid 21.2 million pounds ($41.9 million) in professional fees in the second half of 2007 before its controversial nationalization.
Freshfields is poised to collect the lion's share of legal fees, having acted as Northern Rock's main legal adviser -- a role in which it will continue, according to the report. The firm has also dealt with various shareholder plans and service contract matters.
Magic Circle rival Allen & Overy, meanwhile, is also set to pocket a hefty sum after advising the stricken lender on an attempted takeover bid in October by Sir Richard Branson's Virgin Group. The London giant also acted on the provision of an emergency funding facility from the Bank of England, when banking partner Trevor Borthwick led the team.
Northern Rock has also paid out 12.5 million pounds ($24.7 million) to firms that represented the Tripartite Authorities -- the Financial Services Authority, the Bank of England and the Treasury -- throughout the saga.
Slaughter and May advised the Treasury on the nationalization, fielding a team under partner Charles Randall, while Clifford Chance was instructed to act for the Bank of England, a regular client of Freshfields.