Category: Blog

The High Court has removed a veil protecting companies under judicial management from having their assets attached to recover investments, a ruling likely to open the flood gates of writs of attachment of property, especially against banks.

Justice Happias Zhou ruled in a case involving Bindura University of Science Education (BUSE) and Tetrad Bank that placement under judicial management was not an excuse for not paying depositors their dues.

In the landmark judgment made available last week, Justice Zhou gave BUSE the green light to attach Tetrad Bank’s assets to recover nearly half a million dollars it invested with the financial institution eight years ago, before it was placed under judicial management for almost two and half years.

Justice Zhou slammed Tetrad Bank for trying to hide behind the façade of judicial management to deny the university its deposited funds.

“The judicial management must not be used as an excuse to frustrate the just claims of those who have deposited their money with first respondent (Tetrad Bank),” said Justice Zhou.

“The students who pay their fees expect to get value for their investment which is being severely compromised by the fact that its funds are locked in the first respondent (Tetrad Bank). It must be remembered that the applicant is not asking for a loan, but is seeking to recover what is due to it.”

The ruling is likely to open flood gates from depositors who lost millions of dollars to several banks placed under judicial management following turbulence that hit the banking sector in recent years.

The law has been in favour of companies placed under judicial management, which are exempted from execution and attachment.

This has seen many companies, especially financial institutions, seeking sanctuary under judicial management to avoid losing their assets, leaving depositors with little option to recover their funds.

Justice Zhou noted that in opposing the attachment of its property, Tetrad Bank, in its affidavit, argued that it was entitled to the protection granted by the order from execution on the basis of the provisions of Section 301 (1) of the Companies Act (Chapter 24:03).

In terms of the said section, “while the company is under judicial management all actions and proceedings and the execution of all writs, summons and other processes against the company be stayed and be not proceeded with without the leave of the court”.

In his judgment, Justice Zhou suspended the moratorium against BUSE and granted it leave to attach Tetrad Bank’s assets to recover $473 025,52 plus interest at the prescribed rate.
Justice Zhou was sensitive to the reality that the interests of the State-run university should be protected, especially as a client which invested money with the bank.

He said the bank should be aware that it had the responsibility to ensure that depositors got their money back when it becomes due and no technical barriers should be raised.
Justice Zhou said judicial management was just a temporary arrangement.

He said there was no evidence to suggest that the purpose of judicial management would be defeated by allowing BUSE to execute its writ against the bank.

The dispute between the two institutions spilled into the High Court after BUSE deposited $550 000 into its account held by Tetrad Bank in October 2013.

The bank made an undertaking to pay back the full amount within 30 days, together with interests, at the rate of 13 percent per annum.

This increased to $555 958, 33 and the maturity date was November 8, 2013, but Tetrad failed to honour its obligation.

After repeated demands by BUSE for the payment of the debt, Tetrad only paid $82 942, 81.
Mr Itayi Ndudzo of Mutamangira and Associates represented BUSE, while Advocate Thembinksoi Magwaliba, instructed by Mawere, Sibanda Legal Practitioners, acted for Tetrad Bank. Herald

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Prime Minister Theresa May has been warned that her promise to tighten regulation on tech firms after the London attacks will not work.

Mrs May said areas of the internet must be closed because tech giants provided a “safe space” for terrorist ideology.

But the Open Rights Group said social media firms were not the problem, while an expert in radicalisation branded her criticism “intellectually lazy”.

Twitter, Facebook and Google said they were working hard to fight extremism.

Google (which owns Youtube) Facebook (which owns WhatsApp) and Twitter were among tech companies already facing pressure to tackle extremist content – pressure that intensified on Sunday.

Mrs May said: “We cannot allow this ideology the safe space it needs to breed.

“Yet that is precisely what the internet, and the big companies… provide.”

On ITV’s Peston on Sunday, Home Secretary Amber Rudd said an international agreement was needed for social media companies to do more to stop radicalisation.

“One (requirement) is to make sure they do more to take down the material that is radicalising people,” Mrs Rudd said.

“And secondly, to help work with us to limit the amount of end-to-end encryption that otherwise terrorists can use,” she said.

But the Open Rights Group, which campaigns for privacy and free speech online, warned that politicians risked pushing terrorists’ “vile networks” into the “darker corners of the web” by more regulation.

“The internet and companies like Facebook are not the cause of hate and violence, but tools that can be abused.

“While governments and companies should take sensible measures to stop abuse, attempts to control the internet is not the simple solution that Theresa May is claiming,” Open Rights said.

Professor Peter Neumann, director of the International Centre For The Study Of Radicalisation at King’s College London, was also critical of Mrs May.

He wrote on Twitter: “Big social media platforms have cracked down on jihadist accounts, with result that most jihadists are now using end-to-end encrypted messenger platforms e.g. Telegram.

“This has not solved problem, just made it different… moreover, few people (are) radicalised exclusively online. Blaming social media platforms is politically convenient but intellectually lazy.”

However, Dr Julia Rushchenko, a London-based research fellow at the Henry Jackson Centre for Radicalisation and Terrorism, told the BBC that Mrs May was right, and that more could be done by tech giants to root out such content.

She felt that the companies erred on the side of privacy, not security. “We all know that social media companies have been a very helpful tool for hate preachers and for extremists,” Dr Rushchenko said.

The online world had been a recruiting aid for foreign fighters, and social media needed “stricter monitoring”, both by government agencies and by third party groups that have been created to flag up extremist content.

‘No place on our platform’

However, the major social media firms said on Sunday that they were working hard to rid their networks of terrorist activity and support.

Facebook said: “Using a combination of technology and human review, we work aggressively to remove terrorist content from our platform as soon as we become aware of it – and if we become aware of an emergency involving imminent harm to someone’s safety, we notify law enforcement. “

Google said it was “committed to working in partnership with the government and NGOs to tackle these challenging and complex problems, and share the government’s commitment to ensuring terrorists do not have a voice online”.

It said it was already working on an “international forum to accelerate and strengthen our existing work in this area” and had invested hundreds of millions of pounds to fight abuse on its platforms.

Twitter said “terrorist content has no place on” its platform.

“We continue to expand the use of technology as part of a systematic approach to removing this type of content.

“We will never stop working to stay one step ahead and will continue to engage with our partners across industry, government, civil society and academia.”

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Analysis: Joe Lynam, BBC business correspondent

Calling for technology companies to “do more” has become one of the first responses by politicians after terror attacks in their country.

Theresa May’s comments on that subject were not new – although the tone was.

She has already proposed a levy on internet firms, as well as sanctions on firms for failing to remove illegal content, in the Conservative party manifesto published three weeks ago.

Given that 400 hours of videos are uploaded onto Youtube every minute, and that there are 2 billion active Facebook users, clamping down on sites which encourage or promote terror needs a lot of automatic detection – as well as the human eye and judgement.

Technology companies such as Microsoft, Google, Twitter and Facebook are all part of an international panel designed to weed out and prevent terror being advocated worldwide.

That involves digitally fingerprinting violent images and videos as well as sharing a global database of users who may be extremist.

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Prime Minister Theresa May has been warned that her promise to tighten regulation on tech firms after the London attacks will not work.

Mrs May said areas of the internet must be closed because tech giants provided a “safe space” for terrorist ideology.

But the Open Rights Group said social media firms were not the problem, while an expert in radicalisation branded her criticism “intellectually lazy”.

Twitter, Facebook and Google said they were working hard to fight extremism.

Google (which owns Youtube) Facebook (which owns WhatsApp) and Twitter were among tech companies already facing pressure to tackle extremist content – pressure that intensified on Sunday.

Mrs May said: “We cannot allow this ideology the safe space it needs to breed.

“Yet that is precisely what the internet, and the big companies… provide.”

On ITV’s Peston on Sunday, Home Secretary Amber Rudd said an international agreement was needed for social media companies to do more to stop radicalisation.

“One (requirement) is to make sure they do more to take down the material that is radicalising people,” Mrs Rudd said.

“And secondly, to help work with us to limit the amount of end-to-end encryption that otherwise terrorists can use,” she said.

But the Open Rights Group, which campaigns for privacy and free speech online, warned that politicians risked pushing terrorists’ “vile networks” into the “darker corners of the web” by more regulation.

“The internet and companies like Facebook are not the cause of hate and violence, but tools that can be abused.

“While governments and companies should take sensible measures to stop abuse, attempts to control the internet is not the simple solution that Theresa May is claiming,” Open Rights said.

Professor Peter Neumann, director of the International Centre For The Study Of Radicalisation at King’s College London, was also critical of Mrs May.

He wrote on Twitter: “Big social media platforms have cracked down on jihadist accounts, with result that most jihadists are now using end-to-end encrypted messenger platforms e.g. Telegram.

“This has not solved problem, just made it different… moreover, few people (are) radicalised exclusively online. Blaming social media platforms is politically convenient but intellectually lazy.”

However, Dr Julia Rushchenko, a London-based research fellow at the Henry Jackson Centre for Radicalisation and Terrorism, told the BBC that Mrs May was right, and that more could be done by tech giants to root out such content.

She felt that the companies erred on the side of privacy, not security. “We all know that social media companies have been a very helpful tool for hate preachers and for extremists,” Dr Rushchenko said.

The online world had been a recruiting aid for foreign fighters, and social media needed “stricter monitoring”, both by government agencies and by third party groups that have been created to flag up extremist content.

‘No place on our platform’

However, the major social media firms said on Sunday that they were working hard to rid their networks of terrorist activity and support.

Facebook said: “Using a combination of technology and human review, we work aggressively to remove terrorist content from our platform as soon as we become aware of it – and if we become aware of an emergency involving imminent harm to someone’s safety, we notify law enforcement. “

Google said it was “committed to working in partnership with the government and NGOs to tackle these challenging and complex problems, and share the government’s commitment to ensuring terrorists do not have a voice online”.

It said it was already working on an “international forum to accelerate and strengthen our existing work in this area” and had invested hundreds of millions of pounds to fight abuse on its platforms.

Twitter said “terrorist content has no place on” its platform.

“We continue to expand the use of technology as part of a systematic approach to removing this type of content.

“We will never stop working to stay one step ahead and will continue to engage with our partners across industry, government, civil society and academia.”

---

Analysis: Joe Lynam, BBC business correspondent

Calling for technology companies to “do more” has become one of the first responses by politicians after terror attacks in their country.

Theresa May’s comments on that subject were not new – although the tone was.

She has already proposed a levy on internet firms, as well as sanctions on firms for failing to remove illegal content, in the Conservative party manifesto published three weeks ago.

Given that 400 hours of videos are uploaded onto Youtube every minute, and that there are 2 billion active Facebook users, clamping down on sites which encourage or promote terror needs a lot of automatic detection – as well as the human eye and judgement.

Technology companies such as Microsoft, Google, Twitter and Facebook are all part of an international panel designed to weed out and prevent terror being advocated worldwide.

That involves digitally fingerprinting violent images and videos as well as sharing a global database of users who may be extremist.

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When Nicky Hunter handed in her notice after spending 10 years at a Newcastle firm of solicitors it must have been a heart-in-the-mouth moment, but being given the chance to set up a regional division of a national player was too good to pass upon.

The accomplished divorce and family law specialist had been approached by Ayesha Vardags, the so-called “Diva of Divorce” – almost certainly the UK’s most expensive and best known divorce lawyer – to set up a regional office for her eponymous law firm.

Tynemouth-born Ayesha, a frequent guest on breakfast TV shows, has acted in some of the world’s most complex and high profile divorce cases, involving millionaires and billionaires, celebrities, sporting stars and royalty.

And while London is fast becoming the divorce capital of the world, where ex-wives expect more generous settlements, Ayesha is keen to establish a broader presence through regional offices.

So when Ayesha made it clear she wanted local talent and didn’t want to send London lawyers North to launch the Newcastle office, Nicky and fellow co-director Susanne Shah both jumped at the chance to open the new office, Vardags’ fifth, within the newly refurbished Earl Grey House on Newcastle’s Grey Street.

Just a few months after setting up inside the building, the pair are already accepting clients and taking enquiries, while also networking at every opportunity to get out the message that they are open for business.

It marks a landmark a move for Nicky, who only discovered an aptitude for the law, family law in particular, after spending some time travelling around the US, far from her North East roots – and those roots are embedded in the region’s history too.

Nicky was born in Stamfordham, Northumberland, into the Hunter family which first started the famous ship-building business Swan Hunter.

The firm had been founded by her great, great grandfather Sir George Burton Hunter in 1880, and remained a family firm until nationalisation in 1977, her late father being the last member of the Hunter family to work in the company.

She said: “I remember going to take a friend to one of the launches – they were such great spectacles. Now of course the only place you can see that history is by going to Tyne and Wear Archives.

“It’s one of the things that firmly roots me in the North East, it was something to be so proud of.”

Nicky went to local schools until she was 16 when she went to boarding school in Hertfordshire to complete her A levels.

A degree in history at Oxford University followed but after that she was unsure of what career path to follow, but she certainly she didn’t want to follow the typical Milk Round route which saw so many Oxbridge graduates go into City jobs.

Enthralled by all things historic, Nicky had thoroughly enjoyed spending three years devouring the subject and initially explored options to get involved in documentaries, but time spent in America with a university housemate then piqued her interest in the law.

After spending two years travelling backwards and forwards to America, she became hooked on a court case which had gripped the nation.

She said: “It was there that the seeds of becoming a lawyer were developed. There was a terrible case of a poor mother who had been driven to drowning her kids. What she had done was terrible, but friends who I had thought were pretty liberal were saying ‘we should fry her’.

“I became very aware of the death penalty in America which just stood out, as it still does, as a hideous thing still going on in the Western world.

“What was so terrible about the case was that she had faked a hijacking and it was a huge news. She would undoubtedly have been convicted – but it was the reaction of people that made me wake up. Even that woman, who had done this terrible thing, had a story- all human beings cry out to be understood differently. Everyone’s story can be put into context.

“That’s was the trigger that made me start to look into the law. I looked into studying in the States but it was hugely expensive.

“It was like a twitch of a thread – I knew I would always come home at some point so I came home to study law.”

Returning to the North East, Nicky took a post-graduate conversion course in law at Northumbria University, a two-year course she passed in 2001 after which she went into a training contract at the now closed Gateshead firm Swinburne & Jackson.

Initially working legal aid courses, a role came up within family law after the partner, looking after that section, took maternity leave.

Ending up picking up and running with the family law case load proved very rewarding for Nicky, even though the cases she was dealing with were often emotional.

“I loved it. What family law covers is a huge range of family problems. People often think it just covers divorce, and what happens to children in parental separation, but it’s also about care proceedings and public law work, acting for parents who most times were going to lose their children into the care system.

“That was a real eye-opener and tough stuff to take home with you. Until I came to Vardags I’ve always done that side of things because I think it’s such important work.

“It’s very emotional – you can see that these parents have got un uphill struggle ahead to keep families together, but they have the right for the fight to be made on their behalf to do that, to show they can care for their children.

“It’s about them knowing they have someone on their side, articulating and explaining what they might not be able to do themselves.

“You are dealing with people in the midst of really difficult times in their lives, and what we hear is difficult. You have to be very particular in looking after people starting out in this job, that it doesn’t become overwhelming, because family and emotional issues can be.”

A spell at Kidd & Spoor followed, working in offices in Newcastle and North Shields, before she joined David Gray solicitors on West Road, Newcastle, soon after having two sons.

She worked for the firm for almost 10 years, right up until joining Vardags, working a mixed bag of case law while also developing her finance practise expertise.

April 2013 brought in sweeping changes to legal aid, when the Government removed access to legal aid for most private law cases – these were cases in which, for example, the wife of a millionaire businessman would no longer have access to funding to be represented. It took all scope of private law children and finance cases out of legal aid, unless domestic violence was involved.

Nicky said: “It was just cost-cutting. To this day it has created huge unfairness. There are a lot of people who can’t access legal advice unless they pay for it. What we would do, however. is what we called ‘unbundling’, helping where you can.

“The Government’s hope was that everyone would go to mediation. Mediation has its place but there are certain people it wouldn’t work for.”

Over time, and by adapting to changes in the law, Nicky has become an expert in cases involving complex financial issues arising on separation following marriage, civil partnerships and unmarried relationships.

The 45-year-old, a member of the Law Society’s children panel, is also particularly experienced in cohabitation cases involving property and trusts and she regularly advises on financial applications for children of unmarried parents, while also advising on disputes about the living arrangements for children.

Her work led to her being recognised as a leader in her field in both the Legal 500 and Chambers and Partners – and it also put her on Ayesha Vardags’ radar.

They approached her last year, at a time when she was comfortable in her career at David Gray.

“I was very happy and settled at David Gray, working with good colleagues and hadn’t really been thinking about a move,” she said.

“But this was so different. This was a London firm coming here – a national player setting up here in the region, and I obviously knew Vardags. I was curious.

“It also came at a pivotal time for me. My dad, Adrian Hunter, died suddenly last year.

“He was the last member of the Hunter family to work at the Swan Hunter shipyards, having seen the firm go through four generations.

“He was 72 still working, and was diagnosed with cancer and dead within three weeks. He didn’t even have time to sort his affairs and we didn’t have time to process it. He went from being in hospital not feeling well, to the funeral.

“The move to Vardags was one of those things that felt serendipitous. I was almost questioning ‘life’ at that time, and this felt like a challenge I should take up.

“I met Kathy Thomas the MD, heard of the vision for Vardags and it was exciting.

“I almost didn’t want to say this because I know it sounds corny but I did almost hear my dad say ‘go for it’, that it was time for me to step up.”

Nicky left her last job on December 30 last year and walked into the brand new Vardags office on Grey Street on January 3rd, her task not only to launch the office with co-director Susanne but also to oversee all the details needed to physcially create the office, including its decoration, furnishings and fit-out, all of which has been picked out by their boss Ayesha.

The plush offices have rooms all named after local landmarks in a nod to its location, and they are designed to have the feel of a luxury home – perfect for the target audience: Higher Net Worth (HNW) earners.

Vardags offers a ‘bespoke’ family law service for HNWs across the region, who have any family law need – it’s a niche market, but there certainly is a market in the North East, says Nicky.

In London people of assets of £1.5m to £2m are on their books, but here in the North East their target client has assets of around £500,000 to £600,000 plus income of more than £150,000 a year.

Getting to that clientele is currently involving lots of networking events to build links, including lots of meetings with investment managers and pension specialists who can help to create those links.

“There are only a couple of other firms which are exclusively family law firms – we are only one of three in the region, said Nicky, who now lives in Wylam, Northumberland.

“Part of our role is to get the name out there – we’re going out meeting people, telling people what Vardags do. It’s a name known in family law circles – and there were people from here going to London who wanted the best in family law.

“This firm has potential to be big business here because people can come to us rather than go down south.

“It’s going really well so far – we’re working with clients here and some from outside of the area who are abroad, thanks to Skype.

“We deal with legal unravelling of assets, ultimately dealing in fairness for clients in court, but we also do the planning side – so we see people when everything is great, when divorce is hopefully never going to happen, when they are drawing up pre-nups and cohabitation agreements at the start of their relationship.”

People are squeamish about pre-nups, says Nicky, but she believes they actually make life much easier in the long run – and with 40% of marriages ending in divorce pre-nups should be high on the Wedding to-do list just as much as booking the chocolate fountain and photographer is Vardags’ belief.

After all, it’s thanks to Vardags’ founder Ayesha that pre-nups actually are now worth the paper they are printed on.

Ayesha won a landmark case in 2010 protecting the £100m fortune of German heiress Katrin Radmacher from her ex-husband Nicolas Granatino, as per their pre-nuptial. Katrin’s husband argued in court that the pre-nuptial agreement was unfair but the judges disagreed, and divorce law history was changed forever.

And those agreements can and should go into minute details.

Nicky said: “It’s not all about the disaster of when it falls apart – it’s about the planning. Pets have come into many a dispute that I’ve been involved in – even horses. The law sees them as assets and looks at their worth. And in a number of cases it has come down to ‘what happens to the dogs?’.”

From a standing start, the plan is to grow the now resplendently decorated office from its current three employees to 10, and there’s scope to expand further into the building too.

And while it’s early days yet, both Susanne and Nicky are thoroughly enjoying working together to put the foundations of Vardags in place.

Nicky added: “I’m loving it. It was a big move. A lot of people were skeptical but I haven’t had any doubts that it wasn’t going to take off in the way that it has.

“We’re getting it up and running and getting lots of support from London. It’s been great – it’s a blank canvas.”

Nicky Hunter’s Q&A

What’s your favourite restaurant?

Artisam in Corbridge

Who or what makes you laugh?

My kids again, I have two boys aged ten and twelve and they most certainly have their moments.

What’s your favourite book?

Pride and Prejudice. It’s been described as ‘literary comfort food’ and is one of the few books I can re-read without it getting old.

What was the last album you bought?

Ed Sheeran, Divide

What’s your ideal job, other than the one you’ve got?

A historical documentary maker

What’s your greatest fear?

Flying

What’s the best piece of business advice you have ever received? And the worst?

The best advice is probably to never allow the fear of failing to stop you from trying. And I can’t think of any really bad advice I’ve been given – I think that you need to take on board all the advice you get – but ultimately trust your own instincts.

What’s your poison?

A cold french white

What newspapers do you read, other than The Journal?

The Times and The Guardian (usually on my ipad!)

How much was your first pay packet and what was it for?

I can’t remember the amount but it would have been for my first ever school holiday job – potting plants in a local Garden centre. I can’t remember now but I think we were paid by the pot!

How do you keep fit?

Long walks in the country and the occasional boot camp.

What’s your most irritating habit?

Finishing other people’s sentences.

What’s your biggest extravagance?

My children’s football boots! Or books… I spend far too much on Amazon.

Which historical or fictional character do you most identify with or admire?

This is difficult to choose. Following on from my favourite book, I’d probably say one of the historical characters I most admire is Jane Austen. To have been published as a female writer within her own lifetime, and to have created characters and stories which people can still relate to and enjoy today, over two hundred years later, shows what a rare talent she had.

Which four famous people would you most like to dine with?

Barack and Michelle Obama, James Corden and Clive Stafford Smith

Working Day

There isn’t such a thing as a typical day, which is one of the great things about this job. Our office hours are from 9.00 a.m. – 6.00pm but depending on what needs to be done I may have an earlier start such as for a breakfast meeting or seminar or a later finish if for example a client can only be free to meet after 6.00pm or if there is a deadline to meet. If I have a court hearing in the morning I will usually go straight to court to meet with my client before the hearing.

Most days however start with me arriving at the office at about 8.45 am. I make a cup of coffee first thing and have a brief catch up with my paralegal / assistant and then am at my desk by 9am when I will usually spend about an hour reading, deleting and replying to emails.

Ideally, I will have any client meetings, which might be face-to-face in the office, by telephone or Skype, scheduled from 10am onwards and these can typically last from anywhere between half an hour to two hours. Some days I can have meetings almost back to back, and some days my diary is relatively clear, which is when I will get on with ‘desk-work’.

Each day I have a ‘To-do’ list of work to do for my clients’ cases, which might be writing letters, drafting documents such as agreements, financial statements, reading statements and financial documents of the other party, or preparing a brief to counsel.

This is a very document-heavy job and there is always a lot of information to analyse and present.

Throughout the day there will also be various telephone calls from clients or other solicitors to take.

I don’t have a fixed lunch time, but will usually have lunch at around 1pm. Based where we are at the top of Grey Street, I try and go out for a short walk and get some lunch out of the office but some days it’s just a quick salad or sandwich at my desk, and sometimes it doesn’t happen until much later in the afternoon.

The job isn’t entirely office-based. Some days there will be court hearings to attend either in Newcastle or in the surrounding courts and this can typically take up most of the morning or afternoon.

If we are working with a barrister on a client’s case, and have a meeting or conference scheduled to discuss the client’s case, this will usually take place in the barrister’s chambers at about 4.30pm after the end of the court day.

I usually leave shortly after 6.00pm to catch the train home and have supper with my children.

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When the next financial crisis hits — an event that may be years or decades away — we will learn whether this Congress and the president drew the right lessons from the 2008-09 financial crisis. Congress is arguing over whether government can avoid “bailouts” of large financial institutions and still prevent a full-blown crisis. With all of President Trump’s trials and tribulations, hardly anyone is paying attention.

The debate goes to the heart of the government’s role in the financial system. During the 2008-09 crisis, the Federal Reserve, Treasury and Federal Deposit Insurance Corporation (FDIC) rescued a variety of large financial institutions, including the insurance company AIG, Citigroup, and many banks and lenders. But the rescue provoked a public backlash; many Americans felt that Wall Street was protected while Main Street wasn’t.

To address this complaint, the Dodd-Frank law — the Obama administration’s response to the financial crisis — created a complicated system under which troubled financial institutions could borrow temporarily from the Treasury (via the FDIC). This would, arguably, prevent a panic, as these institutions would otherwise lack the money to repay their lenders. But ultimately, these shaky institutions would be broken up, with their viable segments preserved or sold to other firms and the rest shuttered.

Among banking experts, the process is referred to as Orderly Liquidation Authority, or OLA. It seems a complex solution to a complex problem. Yet, it did not convince skeptics, who argued that for all its twists and turns, OLA would simply be another mechanism to bail out mismanaged banks and financial institutions. A better solution and a sure-fire defense against bailouts, retorted the skeptics, would be to put collapsing financial institutions into legal bankruptcy, where they would be closed or reorganized.

So that’s what the Republican majority of the House Financial Services Committee did in May. There would be no borrowing from the Treasury. Troubled firms would go straight into bankruptcy. End of story? No. A letter from 122 law professors and economists, led by Jeffrey N. Gordon of the Columbia Law School and Mark J. Roe of the Harvard Law School, argued that the House proposal is unworkable and could trigger the panic that the legislation aimed to avoid.

The bankruptcy of one major firm isn’t the main threat. The larger danger is “a financial crisis that threatens the economy and involves multiple institutions failing or tottering simultaneously,” said the letter. The “American economy will need a coordinated response, particularly if the entire financial system suffers a panic or lack of liquidity.” Bankruptcy judges cannot provide this response. It is best left to the Treasury, Federal Reserve and FDIC.

Earlier, Ben Bernanke — chairman of the Federal Reserve Board during the financial crisis — made similar points on his blog. He also denied that OLA represented a bank bailout, because “all losses are borne by the private sector.” Shareholders would almost certainly be wiped out; top managers would lose their jobs. If government loans could not be repaid, there would be a financial assessment on healthier financial institutions to fill the gap.

This is an enormously important debate. We shouldn’t gut Dodd-Frank unless the critics can make the case that what they propose is demonstrably better. They haven’t yet.

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South Korean law firm Yulchon said Sunday it was selected by the Financial Times as Asia’s most innovative law firm in dispute resolution.

It was named one of the top five most innovative firms in the Asia-Pacific region at the FT Asia-Pacific Innovative Lawyers Awards ceremony Thursday in Hong Kong, according to the company. It was recognized by FT as the most innovative law firm in Korea for two consecutive years in 2015 and 2016.

Since 2014, FT has been presenting awards to law firms headquartered in the Asia-Pacific region to recognize innovative legal work.

A Yulchon official attributed the law firm’s success to the company putting innovation at the core of its strategies.

“These awards are a testament to our commitment to excellence and innovation, and our passion for delivering ground-breaking solutions for our clients,” said Yun Sai-ree, a managing partner at Yulchon. 

Yun Sai-ree (center), a managing partner at Yulchon, was named by the Financial Times as the most innovative law firm in dispute resolution, at a ceremony in Hong Kong, Thursday. (Yulchon)

Among more than 500 submissions and nominations from 71 law firms, the company garnered high scores in innovation in three categories — business of law, legal expertise and social responsibility.

The FT recognized Yulchon’s two standout deals: defending Korea’s Finance Ministry for its sanctions against an Iranian bank in a bilateral dispute from 2011-2016 and successfully representing more than 100 Korean firms in corporate tax disputes, according to Yulchon officials.

Earlier this year, Yulchon was also recognized as national law firm of the year by Chambers & Partners, one of the world’s renowned lawyer ranking firms.

By Kim Yoon-mi (yoonmi@heraldcorp.com)

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The directorate has also ensured that 1,196 nationals were recruited in private sector firms.

It has also increased efforts to nab labour law violators. It has said that action is taken against violators as per Article 114 of the Omani Labour Law.

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Former Gov. Pat McCrory called for a “clean” new voter ID law and blasted Gov. Roy Cooper in a speech Saturday to the N.C. Republican Party’s annual convention.

McCrory, a Republican who lost to Cooper last November, had strong words for his successor on Hurricane Matthew relief efforts and on the lawsuits between the governor and legislature.

“Shame on Gov. Cooper for trying to blame President Trump” for the government’s slow response to Hurricane Matthew funding, McCrory said. “Don’t blame someone else for the lack of leadership.”

Cooper had sought $900 million in federal disaster relief money, but so far North Carolina has only received $6.1 million. McCrory said that Cooper has been slow to distribute the Hurricane Matthew relief funding that was approved in a December special session of the legislature.

“The issue’s not money, the issue is action,” McCrory told reporters after the speech. “It takes a governor to speed things up, and right now, there’s no excuse for anyone not having the proper shelter and care since this hurricane occurred in October.”

Cooper spokesman Ford Porter defended the current governor’s work. “Gov. Cooper is focused on creating new jobs, improving our schools, and ensuring that families in Eastern North Carolina have the resources necessary to rebuild from Hurricane Matthew,” Porter said in an email Saturday. “We’ll leave the political punditry to the talking heads and former politicians.”

In his convention speech, McCrory also criticized Cooper’s lawsuits challenging new laws from the General Assembly that curb the governor’s power. The former governor said Cooper is “spending millions of tax dollars on lawsuits to law firms that gave millions of dollars in donations to the current govenror.”

McCrory also took shots at Cooper’s senior adviser, Ken Eudy, who was the founder of the Raleigh public relations firm Capstrat. After joking that “the Russians” were responsible for his loss, McCrory said Eudy is “the only Russian connection in North Carolina.”

McCrory says Eudy’s firm “had a big client in Vladimir Putin.” He noted that Eudy now has an office next door to Cooper and has faced criticism for refusing to stand for the military at sporting events.

Eudy no longer works for Capstrat; it was sold to a larger firm called Ketchum in 2013. Ketchum had a public relations contract with Russia for public relations work until 2015.

The former governor also had advice for the legislature. Republican House and Senate leaders were in the crowd at the NCGOP convention.

“I know for a fact that we had a lot of noncitizens that were voting,” McCrory said. “Ladies and gentlemen, voter ID would have stopped it. Keep it a clean bill, stay with a voter ID law and get that passed.”

A recent audit by the State Board of Elections found 41 noncitizens who cast ballots. They were legal residents who had successfully registered to vote. An ID requirement likely wouldn’t have stopped them. The U.S. Supreme Court ruled last month that it won’t reinstate North Carolina’s original voter ID law; parts of the legal challenge to the law included changes to voter registration and early voting requirements.

Since leaving office, McCrory has been working as a consultant, but he hasn’t named the businesses he’s working for. “I’ve been playing a lot of golf and helping out several companies in areas that I have a passion for,” he told reporters Saturday, adding that he “serves on a couple of boards” and is working “with a foundation.”

“I’m having a lot of fun,” he added.

While McCrory’s speech to the NCGOP sounded much like his 2016 campaign speeches – and it earned him a standing ovation –the governor told reporters he’s not running for any office for now.

“I’ll make a decision about running for elected office much further in the future,” he said.

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Spend millions. Bring in hundreds of millions.

South Carolina’s largest special interests know the time they spend working the state’s lawmakers under the S.C. State House dome is well spent.

But was the help they got from one of South Carolina’s most influential political families legal?

Recently indicted state Rep. Rick Quinn, whose father operates a sprawling political consulting empire, stands accused of voting and lobbying in the Legislature on behalf of special interests that, prosecutors allege, paid him through his direct-mail business and his father’s firm, Richard Quinn & Associates.

The Lexington Republican also is charged with failing to disclose accepting nearly $4.6 million that he received from special interests that lobby the Legislature.

The former House majority leader created a pay-for-play back channel that gave those companies, groups and agencies an upper hand in the Legislature, according to special prosecutor David Pascoe, who is leading an ongoing State House corruption probe that has indicted four GOP lawmakers.

Both Rick Quinn and his father, Richard Quinn, have denied any wrongdoing. Rick Quinn has called Democrat Pascoe’s probe a “partisan witch hunt” targeting Republicans. Richard Quinn has not been charged with any crime, nor has anyone representing the companies or agencies.

Much at stake

The companies that Quinn is charged with illegally helping are big fish in the pool of special interests vying for influence in South Carolina’s State House.

They include the Cayce-based SCANA utility; telecom giant AT&T; the Columbia-based, health-insurance powerhouse BlueCross BlueShield; the Columbia-based Palmetto Health hospital system; the S.C. Trial Lawyers Association; the payday lending industry; the Charleston-based State Ports Authority; the University of South Carolina; “and many, many more,” according to special prosecutor Pascoe.

Combined, those special interests have spent at least $10.4 million since 2009 to employ a stable of lobbyists, excluding the $4.6 million that Pascoe says Quinn was paid by groups with business before the state. Those lobbyists legally are paid to sway lawmakers’ votes on key legislation, regulatory appointments and budget decisions.

The special interests also donated at least $510,000 during the same time period to curry favor with the powerful House GOP Caucus, whose 77 members make up a near-supermajority in the State House’s 124-member lower chamber. Two of the caucus’ past majority leaders, including Quinn, have been indicted in Pascoe’s probe.

Influence is not cheap. But it appears to be worthwhile.

In the last decade, roughly $8.3 billion has flowed from or through the state to BlueCross BlueShield, AT&T, Palmetto Health and SCANA – companies that have ongoing contracts with the state. Most of that money – more than $7 billion – was state health plan money that BlueCross BlueShield used to pay medical claims for state workers and retirees. The insurer was paid $741 million by the state for its work, mostly for running the health plan.

In addition, the State Ports Authority and the University of South Carolina have received close to $1 billion combined in state appropriations since 2011.

Quinn not alone

The average taxpayer may not like the influence that special interests exert on government. But, done legally, that lobbying is a fact of political life in the capitalist United States.

However, some special interests stray from the legal avenues of influence, government watchdogs say.

“These folks are not wanting to confine themselves to any one road to influence,” said Lynn Teague with the League of Women Voters, speaking generally about the multiple ways that special interests buy influence.

Quinn is not the only legislator accused of using his public office to help business clients.

In December, state Rep. Jim Merrill, R-Berkeley, was hit in December with a 30-count indictment alleging he accepted money to influence government decisions and sponsor legislation for private interests.

One count charged former House Majority Leader Merrill with taking $172,485 from a New Jersey-based bus contractor in exchange for sponsoring a failed 2012 bill “regarding legislation to privatize school buses” in the Palmetto State.

Merrill also was paid by a company that wanted to buy a Charleston law school, a Savannah-based engineering firm, the Charleston Area Visitors and Convention Bureau, the S.C. Association of Realtors, the S.C. Manufacturers Alliance, the state Association of Convenience Stores and — like Quinn — the Trial Lawyers Association, according to his indictment.

Merrill has said he is innocent and vowed to fight the charges.

‘Strikes at the heart of … democracy’

Lobbyists often are derided for operating in the shadows.

But they are required to make some of their activities public. For example, they must register with the state and disclose the special interests that they work for as they try to influence public policy.

What Quinn and Merrill are accused of doing – using public office to help clients that paid them – is much more subterranean, observers say.

“It really strikes at the heart of what it means to be a representative democracy if all the citizens are not equally represented,” said Winthrop University political scientist Scott Huffmon.

“Lawmakers are elected to represent the best interests of their constituents, not the best interest of their bank account or the companies that pay them.”

Of the six companies, groups or agencies that The State reached out to on Friday, two responded to questions about working with Quinn and being named by Pascoe as benefiting from his work.

“AT&T is not aware that it is the subject of any allegations by the special prosecutor,” said Clifton Metcalf, the company’s director of public affairs for the Carolinas.

“AT&T has not paid any entity associated with the Quinns to lobby at the Legislature on our behalf, and the persons we have authorized to lobby at the Legislature on our behalf are set out in our filings with the State Ethics Commission. We will not release non-public information regarding details of relationships AT&T might or might not have with other entities.”

The University of South Carolina said it has never hired Rick Quinn for any purpose and never paid Richard Quinn & Associates to lobby.

But it and the others named in Quinn’s indictment have huge stakes in what goes on at the State House.

How huge?

Here’s a look at what was at stake for the companies, groups and state agencies that Pascoe says benefited from Quinn’s alleged lobbying.

SCANA

Customers of SCANA subsidiary SCE&G need only look at their rising power bills for proof of the utility’s influence in state government.

The utility has won nine rate hikes on customers to finance the construction of two nuclear reactors in Fairfield County. About 18 percent of an SCE&G customer’s power bill now goes to pay for that incomplete project.

Now estimated to cost $14 billion, the project is about $3 billion over budget and faces an uncertain future after Westinghouse Electric, a major contractor, filed for bankruptcy. While SCE&G and state leaders are looking for a way to keep the project afloat, critics fear another rate hike or that the reactors never will be finished.

Power companies are among the top spenders on lobbying at the State House.

The state law that allowed SCE&G to pass on to customers the cost of building the Fairfield reactors was passed in 2007. Since 2009, the earliest year for which data is available, SCANA has spent $1.5 million to lobby S.C. lawmakers.

Now, concern over how cost overruns will impact South Carolinians’ wallets is driving a proposal to protect utility consumers against rate hikes on future projects.

SCANA also has other interests in state government’s operation.

The state is a customer of the power company, for instance, and has paid the utility $247 million over the last decade for power.

Members of the General Assembly also appoint members of the state Public Service Commission, which regulates utilities and decides if utilities can raise customers’ rates.

The Cayce-based utility has paid Richard Quinn & Associates a retainer for its counsel on public policy strategies since the mid-1990s, a SCANA spokesperson said again Friday, adding it would be inappropriate for the company to comment on a pending investigation.

The company has declined to say how much it has paid RQ&A.

University of South Carolina

The state’s flagship university has a huge interest in what happens under the State House dome.

The downtown Columbia school relies on state legislators for about 10.5 percent of USC’s $1.5 billion-a-year budget.

USC makes annual pleas – most falling upon deaf ears – for lawmakers to spend more state money on higher education. This year, for instance, it urged legislators to borrow hundreds of millions of dollars for maintenance and building projects at S.C. colleges. USC stands to get $25 million to renovate its old law school building if legislators approve a borrowing bill for higher education next year.

It recent years, USC has relied upon lawmakers for $5 million a year to launch and support Palmetto College, its online degree completion program, and for $20 million to help construct a new $80 million home for its law school.

Now, USC wants $50 million from the state to kick-start a new, $200 million medical school and health sciences complex on downtown Columbia’s Bull Street property.

As justification for putting Richard Quinn & Associates on retainer in the aftermath of the Great Recession, USC cited the challenges it faced in trying to expand its medical school into Greenville in a “difficult economic, political and cultural climate,” school records show.

But USC did not pay Richard Quinn & Associates for lobbying at the federal, state or local level, the school’s contract with the firm explicitly states.

Instead, the contracts state, USC paid the firm $491,900 from 2011 to 2015 for public relations and consulting work.

That included “governance and regulatory approval – presentations, messaging, strategic planning, crisis management, public opinion tracking, long-term university marketing and branding among South Carolina’s opinion, community, business and government leadership.”

For example, the consulting firm helped USC prepare its bid to S.C. lawmakers for a new law school building and advised the university on a proposal to rollback state regulations of colleges, the documents show.

S.C. Ports Authority

The State Ports Authority does not get an annual appropriation of state dollars from S.C. legislators.

But the quasi-public agency has plenty at stake in the State House.

Look no further than the half-billion-dollar Charleston Harbor deepening project, set to give South Carolina the deepest harbor on the East Coast.

After much debate, state lawmakers set aside more than $300 million in 2012 to foot South Carolina’s share of the bill for the project. Congress authorized the work four years later, and work is expected to begin later this fall.

Over the past four years, S.C. legislators also have paid or pledged more than $10 million for work on ports in Jasper and Georgetown counties.

Since 2009, the Ports Authority has spent $432,000 lobbying lawmakers. During that same period, it also paid more than $2.6 million to Richard Quinn and his firms.

That money, the senior Quinn has said, paid for polls tracking public opinion of the port, and for his firm to write, produce and place TV and radio advertisements.

BlueCross BlueShield

BlueCross BlueShield tops the state’s list of its highest-paid vendors because it manages the state’s more than a billion-dollar-a-year state health plan for employees and retirees.

The state has paid the insurer roughly $741 million since mid-2007 in fees mostly for running the state health plan. In that role, the insurer managed more than $7 billion in medical claims for state employees and retirees, paying them with money from the state’s health plan.

The insurer has a lot at stake in state government. In addition to managing the state health plan, it has more than 1 million S.C. customers and 11,000 employees.

The health-care giant, which has spent $1.6 million lobbying lawmakers since 2009, declined to comment for this story.

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