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September 9, 2010 12:31 PM

Freshfields, Leading Irish Firms Take Roles on Anglo Irish Bank Split

Posted by Brian Baxter

More than a year and a half after taking control of Dublin-based Anglo Irish Bank, the Irish government announced on Wednesday that it will move ahead with plans to split the troubled lender into two parts.

Saddled with a crushing debt load, Anglo Irish has teetered on the edge of insolvency since the collapse of Ireland's economy--once dubbed the Celtic Tiger--amid the global economic downturn two years ago.

With fears that Anglo Irish's debts could adversely affect the Irish government and the rest of the European Union, which is still reeling from the Greek debt crisis earlier this year, Ireland's finance ministry released a statement detailing the decision to split Anglo Irish into a "funding bank" and an "asset recovery bank," with plans to wind down the latter over several years.

The Am Law Daily has learned that three firms have secured key legal advisory roles as Anglo Irish begins its gradual dissolution.

Irish firm Arthur Cox, which won the mandate to advise the Irish government on the nationalization of Anglo Irish in January 2009, is continuing to represent the state on the breakup and recapitalization of the bank. Pádraig Ó Ríordáin, managing partner of Arthur Cox, is leading the assignment along with capital markets head Cormac Kissane, corporate partner Maura McLaughlin, and banking and financial regulation partner Robert Cain.

The current attorney general of Ireland, Paul Gallagher, is also involved in advising the Irish government on the Anglo Irish situation as a member of Prime Minister Brian Cowen's cabinet. Additionally, Irish finance minister Brian Lenihan, who holds a law degree, is playing a central role in overseeing the recapitalization of Anglo Irish.

Rod Carlton, managing partner of the antitrust practice at Freshfields Bruckhaus Deringer in London, is advising the board of Anglo Irish along with Ronan Molony, a current corporate partner and former chairman of Irish firm McCann FitzGerald.

Some former members of Anglo Irish's board, most of whom resigned or were terminated prior to the nationalization, have come under fire in recent years for obtaining sweetheart loans from the bank during Ireland's now departed economic boom. Irish police raided the Dublin offices of Anglo Irish in February 2009 as part of an investigation into a series of financial scandals at the bank.

Declan Moylan, chairman of Dublin-based Mason Hayes + Curran, was retained by the new board of Anglo Irish last year to issue a report on corporate governance at the bank after it ran into financial difficulties. Moylan submitted his report to the board earlier this year.

Irish firm Matheson Ormsby Prentice served as the lead external legal adviser to Anglo Irish prior to its nationalization. Robert Heron, a corporate partner in MOP's Dublin office who has advised Anglo Irish in the past, did not immediately respond to a request for comment on whether the firm has continued its client relationship with Anglo Irish.

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Nice exhaustive information about the people and firms involved. I was wondering about the outcome of this. Can anybody please share here as it is already 6 months.

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