IFLR 1000
The Guide to the World's Leading Financial Law Firms

Project finance was relatively quiet, although the Belgian market managed to attract some major PFI (private finance initiative) and PPS-projects, a publiek-private samenwerking (public-private co-operation), such as the Diabolo project, the Flemish schools public-private partnership (PPP) project, the Brabo project and the energy-related Belwind project. Firms have also seen an increase in regulatory advice since the meltdown of Lehman Brothers in September 2008....

Project finance was relatively quiet, although the Belgian market managed to attract some major PFI (private finance initiative) and PPS-projects, a publiek-private samenwerking (public-private co-operation), such as the Diabolo project, the Flemish schools public-private partnership (PPP) project, the Brabo project and the energy-related Belwind project. Firms have also seen an increase in regulatory advice since the meltdown of Lehman Brothers in September 2008.

On the banking side, all of the big players in Belgium got into trouble during the global financial crisis and Dexia, KBC and Fortis were nationalised. With the public's confidence in the banking system reaching an all-time low, the collapse of many household names had an immediate effect on the market. Big-ticket financing deals virtually disappeared and in the last 15 months bank lending has decreased sharply. Although partners have held on to the deals that were already in the pipeline, they have unavoidably been hit by their fair share of those that have been postponed or cancelled.

An unprecedented, turbulent year has finally come to an end for most corporate and capital markets lawyers in Belgium. "It was pretty bad, the market completely dried up at the end of 2008," says a senior partner....

An unprecedented, turbulent year has finally come to an end for most corporate and capital markets lawyers in Belgium. "It was pretty bad, the market completely dried up at the end of 2008," says a senior partner. "Deals take longer and are much smaller. Nobody has the money or wants to take the risks," says a senior partner.

Most firms used to have a prospering capital markets practice with a significant number of equity deals per year, but many of those transactions stopped materialising after the slow-down of the capital markets.

"Many IPOs were aborted and many capital markets practices diminished. Since the fall of Lehman-brothers no one is eager to lend money," says one senior lawyer. Many lawyers believe confidence must be restored in order to get the market moving again and out of its negative spiral.

The relatively small amount of work in the market this year was mainly divided among the magic circle and Wall Street firms, while other players busied themselves with restructuring-related work. "If someone says he has been busy with capital markets, he is lying," notes one senior partner.

If one jurisdiction's banking sector was shaken to its foundations this year, it was Belgium. The two national banks were brought to the verge of collapse after shares plummeted and state of their finances came to light....

If one jurisdiction's banking sector was shaken to its foundations this year, it was Belgium. The two national banks were brought to the verge of collapse after shares plummeted and state of their finances came to light.

First there was Fortis, which dominated the financial news for much of the year. The bank's takeover of ABN Amro, together with Santander and the Royal Bank of Scotland, turned out to be a disaster and resulted in an €11 billion rescue plan – the dumping of Fortis' stake in ABN Amro and the bank effectively being sold to BNP Paribas.

Belgium was shocked. The general consensus was that not only the sub-prime economic crisis but also management errors contributed heavily to the loss of the country's biggest bank. The Dutch and Luxembourg branches were sold to their respective governments, and the remaining part of the bank was obtained by the Belgian government, and subsequently sold to BNP Paribas.

And then there was Dexia. The Belgium-based bank that mainly lends to local governments received a €6.4 million bailout package from the Belgian and French governments. Dexia's chairman and chief executive were forced to resign and its share price fell by around 50%. The bank was nationalised. Rating agency Moody downgraded the bank's strength to "C with a negative outlook". And in February 2009 the bank announced it had made a loss of more than €3 billion in 2008.

A third bank was helped out in early November 2008, when the Belgian government injected more than €3.5 billion into Antwerp-based KBC bank. Its stock market value had fallen by 74% since the start of 2008. The Belgian government realised it needed to prevent more mass panic after the nationalisation of Dexia and the break-up of Fortis.

These events created work for many law firms but, away from the buyouts, M&A workflow was slow. Firms noticed a dramatic decline in deals and, even if there was a deal to close, it took much longer and was significantly smaller. "These are the worst conditions for a long time, probably worse than the early 1990s," says one partner. "Many closed transactions and future deals are strategic and out of necessity, including government-forced mergers among banks."

Within many firms activities and personnel were shifted internally, with M&A lawyers quickly resprayed as restructuring experts. "For those who had structured their work around M&A and capital markets in the last ten years, and threw out restructuring people, it backfires now," says one partner. "Those firms will have to let go a lot of people."