Potential buyers are understood to be touring Carillion’s managed legal services arm today, as staff wait to hear their futures following the construction companies’ collapse earlier this month.
Interested buyers for Carillion Advice Services (CAS) are being shown around CAS’s offices today and Thursday. CAS is staffed by about 70 paralegals, the bulk in Newcastle, plus 10 in Birmingham.
In a briefing to staff this morning, directors at CAS said there had been significant interest in the managed services arm and that they were currently in the advanced stages of a sale process to a number of interested parties.
It is understood that there were initially about 20 buyers interested in acquiring the business, but there are now two left in the running.
CAS provides legal support services to Carillion but also has external clients – including Carillion’s panel firms – for which it handles routine, low-cost legal work such as contract management, document review and due diligence.
The managed legal services arm is 75% owned by Carillion Construction Ltd, which was one of the first six Carillion companies to enter liquidation on 15 January.
A source inside Carillion said: “It is still unclear what type of work CAS will be undertaking if and when it is purchased.”
In an email seen by Legal Week, staff were told that in advance of potential buyers touring the premises they were to “make sure that everything’s looking tidy and professional, and documents are stored confidentially in closed cupboards…and be mindful when considering conversations around the desks”.
Employees of CAS were paid today and have been told that they will continue to be paid for the work that they do while talks over the sale continue. In the briefing, staff were told that if there is a sale they will transfer into the acquirers’ business. However, it is understood, that some staff have already left with others planning to resign.
CAS, which is in the process of applying for an alternative business structure licence, was acquired by Carillion in 2011, prior to which it was attached to energy services company Eaga.
Services it offers include a document and contract review process which uses a traffic light system to flag up potential risks, and a due diligence and compliance service to minimise exposure to fraud, bribery and corruption.
Prior to its collapse, Carillion’s external legal panel comprised Slaughter and May, Linklaters, DLA Piper, Clyde & Co, FBC Manby Bowdler, Irwin Mitchell, Kennedys, MacRoberts, Pinsent Masons and RPC.
The Wolverhampton-based company filed for compulsory liquidation on the 15 January, after last-ditch rescue talks with lenders failed.
A raft of firms secured roles advising on both the insolvency and the company’s difficulties in the run up to the collapse, with Freshfields Bruckhaus Deringer and Dentons advising both the official receiver and PwC as special manager on the liquidation.
Others involved include Carillion’s long-term adviser Slaughter and May; Clifford Chance and Linklaters for the lenders; Mayer Brown for the Pension Protection Fund; as well as Akin Gump Strauss Hauer & Feld and Willkie Farr & Gallagher.