Magic circle firm Slaughter and May handed stricken Carillion a bill of more than £8m for legal advice it gave the company during an eighteen-month period before the outsourcer’s demise.
A letter from senior partner Steven Cooke to MPs shows Carillion racked up a bill of £8.38m between 1 July 2016 and 15 January 2018. Of that total, £6.8m was paid. Work undertaken for the company included working on restructuring options and a potential rights issue.
Publication of the letter comes after a scathing report by MPs into the collapse of the company was published earlier this week. The report, from the Work and Pensions, and Business, Energy and Industrial Strategy (BEIS) committees, accused City advisers of ‘squeezing fee income out of what remained’ of the company in the final few days before its collapse. The letter from Slaughter has today been published on the committee’s website.
According to the report, on 12 January, three days before the company went under and one day before chairman Philip Green wrote to the government pleading for public money to keep it afloat, £3.9m was paid out to law and accountancy firms. Slaughter and May was paid £1.19m while magic circle counterparts Clifford Chance and Freshfields Bruckhaus Deringer were paid £149,104 and £91,165 respectively.
Publication of the report followed months of oral hearings and trawling through evidence. Cooke’s letter, written in February, added that a further £1.2m was unbilled as of 15 January.
The letter also comfirms that the fees do not include disbursements or VAT - the firm was not paid any success fees. Cooke wrote: ‘Had our work relating to Carillion’s financial position concluded, we would have then had the ability to seek an uplift on our fees.’