The collapse of Thomas Cook last month took the 175-year-old holiday group away from two law firms that had been its loyal advisers for more than a decade; it is a road that has seen plenty of twists and turns.
Slaughters’ relationship with the company goes back to at least 2007, when William Underhill, one of Slaughters’ old-school M&A superstars who retired last year, led the way on Thomas Cook’s merger with Condor, the German low-cost airline. Slaughters partnered with German law firm Noerr at the time for advice on the German aspects of the deal.
After that, the firm did at least one transaction every year related to the company, and despite the rest of the corporate world being engulfed in the financial crisis, it does not seem like Thomas Cook took a hit. Also in 2007, Underhill led a team that advised MyTravel on its merger with Thomas Cook, and in 2008 he went back to advising the holiday group on its acquisition of hotels4u.com. In 2009, Roland Turnill took the helm in Thomas Cook’s acquisition of Gold Medal, an independent travel company; in 2010 Underhill was back again on a proposed merger with the Co-Operative Group to create the UK’s largest high street travel network.
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It was Underhill and Slaughters’ former partner Tim Pharoah, now a consultant at the firm, who led on the last three transactions for the company before its legal counsel shift. They were Thomas Cook’s £1.4bn financing package with lenders in 2012, its 2013 £1.6bn capital refinancing plan and in the same year, the sale of Thomas Cook’s Egypt and Lebanon businesses. Slaughters did not publicise any further deal mandates for Thomas Cook until the group’s recapitalisation plan with Fosun this year, but is understood to have remained active behind the scenes.
What changed? Thomas Cook’s in-house counsel. In April 2013, Craig Stoehr became general counsel at the company, after a short stint at the Dubai offices of the Eastgate Capital Group, the private equity arm of Saudi Arabia’s National Commerce Bank. He had previously spent 17 years at Latham & Watkins’ offices in New York and Qatar. Just a few months after he joined, another Latham associate from the London office, Alice Marsden, joined Thomas Cook’s legal team too. She would rise through the ranks of the company and succeeded Stoehr as GC in 2016. Marsden will leave Thomas Cook at the end of the year for Taylor Wimpey and was replaced over the summer by current head of legal Rebecca Symondson. Unlike her two predecessors, Symondson has no prior connection to Latham, instead hailing from Slaughters’ TMT team in 2010.
The Latham alumni at the heart of Thomas Cook’s legal operations had a big influence in the firm’s activities and sparked its relationship with the company. And the change in general counsel was an opportunity for Latham to show that it could play a role in Thomas Cook’s transactions too.
Since winning its first mandate for Thomas Cook in 2013 on a £1.6bn refinancing, described by the company’s CEO as a milestone deal, Latham went on to carry out the bulk of the group’s transactional work.
The now-retired Latham partner Christopher Hall led on the 2013 refinancing plan, collaborating with Slaughters. A year later Nick Cline, now corporate head at Latham’s London office, led on the company’s sale of Gold Metal around six years after Slaughters had advised on the original acquisition of the UK long-haul flights company. In the past two to three years the firm has further helped Thomas Cook on its airline strategy.
In 2018, however, alarm bells started sounding for the company’s financial health, and in April it hired restructuring firm AlixPartners to work on its balance sheet and implement a restructuring plan for its £1.6bn debt of the time. Its biggest saviour seemed to be Chinese company Fosun, which in July invested £750m into Thomas Cook as part of a proposed recapitalisation and separation of the group. Clifford Chance advised the Chinese conglomerate, while Latham continued to advise the company’s in-house legal team, and Slaughters returned to the fray to advise Thomas Cook’s board.
After the latest attempts to rescue the company ultimately failed, Latham and Slaughters have had to take a step back following the arrival of administrators. It’s a familiar tale and comes nearly two years after Slaughters also had to retreat after the collapse of another high-profile client, Carillion. But while Dentons and Freshfields Bruckhaus Deringer took over post-Carillion, it’s Ashurst that has joined the mix on the Thomas Cook collapse, advising the official receiver and administrators. Despite the best efforts of Latham and Slaughters, they have had to retrench on Thomas Cook’s legal direction for the first time in more than ten years.