The firm is acting alongside magic circle rival Freshfields Bruckhaus Deringer, which is advising on corporate issues. Yesterday the Treasury announced that a guarantee to protect existing deposits will be extended to new deposits made after 19 September.
A&O advised Northern Rock on its initial emergency funding from the Bank of England on 13 September and has been retained on all banking matters since, led by banking partner Trevor Borthwick.
A&O’s role is understood to leave Linklaters as the only magic circle firm not currently involved in the saga.
The news comes as Freshfields Bruckhaus Deringer has continued to insist that it went through all “appropriate measures” in advising Northern Rock on its current funding crisis despite the fact that it advised the Bank of England opposite A&O on the emergency funding package last month.
Freshfields’ position with Northern Rock has been debated in the City given its long-term links with the Bank of England, which it has been claimed could have the possibility to generate a conflict.
The Bank of England has subsequently instructed Clifford Chance (CC) while potential buyers are sought out to acquire the stricken mortgage lender.
One senior corporate partner at a magic circle rival commented: “Freshfields will obviously argue there is no legal conflict of interest and that they got informed client consent for any potential conflict arising from possessing confidential information. They will say advising on the facility and advising on the commercial aspects are two separate transactions.”
Slaughter and May has also capitalised on the ongoing saga, with the elite law firm instructed on behalf of the Treasury to advise on options for the beleaguered lender.
