The Work
January 5, 2009 6:03 PM
Slaughter and May, Linklaters on Waterford Wedgwood Receivership
Posted by Zach Lowe
Apparently, when people lose a lot of money they become less willing to spend thousands of dollars on fancy crystals and ceramics. That fall in demand is the primary reason experts think Waterford Wedgwood's 14 U.K. business units fell into receivership--the U.K. equivalent of bankruptcy, according to the New York Times.
And that means lots of work for the premiere U.K. bankruptcy and restructuring lawyers, in this case Slaughter and May (representing Waterford) and Linklaters (representing Deloitte, which has been appointed administrator to the troubled units), according to Legal Week, an Am Law Daily sibling publication.
Linklaters has represented several administrators in bankruptcy or receivership cases, including Deloitte in the Woolworths collapse, Legal Week notes.
Waterford Wedgwood formed in 1986, when Irish-based Waterford merged with the British ceramics company Wedgwood. Both companies have famous histories dating to the 1700s, and their creations have appeared everywhere from Times Square in New York (the ball that drops to mark the end of each year is a Waterford) to the homes of every president from Dwight Eisenhower to Ronald Reagan. The latter kept his jelly beans in a Waterford dish, the Times says.
Interestingly, some analysts are saying Waterford Wedgwood hurt its financial situation by deciding against moving much of its production to countries with plentiful cheap labor. Its lenders, including the Bank of America, decided over the weekend they could not give Waterford any more time to find a takeover partner or raise the capital reserves necessary to keep its end of its loan agreements, according to the Times.
Half the company's revenue comes from the United States, and the company's non-U.K. businesses (including units in the U.S.) are not affected by today's filing, the Times says.
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Waterford Wedgwoods failure has little if anything to do the the current financial crisis. Over the last 6 years the company has accumulated losses of over 1 Billion Euros. The whole company has been defying gravity for at least 4 years. The only significance of the current financial situation is that bankers who, hitherto, have been seduced by gilt tongued descriptions of Waterford Wedgwood as a Luxury Lifestyle Brand, have finally realised that call it what you will the company is a financial disaster that cannot turn a profit. When stripped of all the hyperbole Wedgwood is simply a loss making manufacturer of cups and saucers. It cant compete, it hasn't competed for 6 years and its designs are as relevance to modern day living as dinner jackets have to the average family dinner. Reason has finally prevailed and any Private Equity Partnership that thinks it can turn this ship around had better have deep pockets and a lot of patience. In all reality it is almost certainly long past its use by date.
Comment By Simon Carrel - January 8, 2009 at 8:38 AM