Dubai World's massive debt restructuring will give a ton of work to law firms with deep roots in Dubai, and the bulk of the work so far seems to be going to U.K.-based firms with a long history of client work there. Clifford Chance has scored the starring role as lead adviser to Dubai World, a longtime firm client, according to two sources familiar with the matter who verified the accuracy of this report in the U.K.-based publication Legal Week.
Dubai World announced last week that it was seeking a standstill on some of its $60 billion in outstanding debt, a development that sent markets falling across the globe, according to Bloomberg and The New York Times. On Tuesday, the holding company released a statement clarifying that it is seeking to restructure just $26 billion of that debt, all owed by its property unit, Nakheel. Dubai World's other subsidiaries, including Istithmar and Infinity World, are on "sound" financial footing, Dubai World said.
Clifford Chance declined to confirm that is representing Dubai World.
On the other side: Ashurst is advising a group of noteholders who control about 25 percent of Nakheel's debt, according to Bloomberg and Jo Shepherd, a firm spokeswoman. Partners Matt McDonald and Abradat Kamalpour are leading the Ashurst team on the matter, the firm tells us. Allen & Overy is advising a consortium of large commercial banks that lent money to Dubai World and its subsidiaries, according to two sources with knowledge of the situation. Royal Bank of Scotland Group has been the largest underwriter of Dubai World loans, and HSBC Holdings has the most at risk in any large-scale Dubai World default, according to Bloomberg.
The law firms either declined further comment when we reached them on Tuesday or did not immediately return calls seeking comment.
One veteran Dubai-based lawyer at an Am Law 100 firm we spoke to tells us the situation is as busy as you would expect. The lawyer, who asked to remain anonymous because his firm is seeking to represent some Dubai World creditors, says those creditors are calling their regular outside counsel to inquire about their options in various scenarios. Firms are scrambling to nail down clients, the source tells us.
That got us (and our editors) wondering how much business this restructuring will provide the firms that rushed into Dubai during the recent boom times. Since 2007, a pile of Am Law 100 firms have opened offices in Dubai, including King & Spalding; Weil, Gotshal & Manges; Bracwell & Giuliani; Kilpatrick Stockton (which closed its London office shortly after opening in Dubai); Chadbourne & Parke; and Reed Smith, which also hired Dubai World's former general counsel in November 2007. Other firms, including Fulbright & Jaworski, beefed up their Dubai offices shortly before the global economy collapsed.
What's the future of the Dubai legal market? That's a question we hope to weigh in on over the next few days.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.