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New York firm Donovan, Leisure has been crippled by the loss of two-thirds of its lawyers to Orrick, Herrington & Sutcliffe, the California-based firm which has been expanding aggressively in New York. The two firms had been discussing a merger, but when the talks failed Orrick hand-picked the lawyers it wanted, including 14 partners and chairman Peter Coll. "Our primary interest was the litgation department," says New York managing partner Michael Voldstadt, soon to transfer to the new London office. "But there were other parts of the firm that interested us. The fact is that law firm mergers rarely happen. There was also a conflict issue that took a long time to resolve — eventually we just drifted apart."

A group of top lawyers from White & Case, including the heads of its asset finance practice, have left to join Linklaters' New York office. The lawyers – Marianne Rosenberg, Truman Bidwell Jr, and Robert Smith – resigned on May 8, and were immediately frogmarched from the building. They joined Linklaters' office on Monday, May 11. Rosenberg and Bidwell were the co-heads of White & Case's worldwide Equipment and Facility Finance Group, while Robert Smith specializes in tax and project financing.

The Italian securities regulator, CONSOB, has established new conduct of business rules for EU-based firms providing investment services in Italy through a branch. By Piero Salera of Pavia e Ansaldo, Rome

Without recourse to international arbitration under the BOT Decision, foreign investors have stopped financing Turkish infrastructure projects. International treaties may offer a solution. By H Elizabeth Kroeger and Timothy Kautz of Jones, Day, Reavis & Pogue, Frankfurt

Decree 3119 of 1997 regulated, for taxation purposes, the amounts allowed as deductions from net income when associated with articles imported massively as contraband.

The draft Directive on settlement finality, incorporating amendments proposed by the European parliament, was approved by the Council of Ministers at the end of April 1998. It provides for legislation to deal with the position of cross-border payments when a bank or securities firm cannot meet its obligations. It aims to cut the systemic risk in payment and securities settlement systems and to minimize the disruption to a system caused by insolvency proceedings against a participant in the system.

In early March 1998, the German federal government published a draft statute for the implementation of EC directives on deposit guarantee schemes (94/19/EC) and investor compensation schemes (97/9/EC). The statue will create a whole new system of compensation schemes. The existing (private and voluntary) deposit protection scheme of the association of private banks in Germany (Einlagensicherungsfonds), offering an exceptionally high degree of protection (ie each deposit is insured up to an amount equivalent to 30% of the bank's liable capital) will remain in place with the new compensation schemes.

While Hong Kong law firms are suffering from the consequences of the regional financial crisis, the less affected Chinese legal market continues its evolution. Barbara Galli reports

Confidentiality issues can affect not only how you issue project bonds but whether a deal is even possible. Richard Forster reports on the disclosure issues facing sponsors and bankers

The partial privatization of Airports Company South Africa (ACSA), a company operating nine airports, is completed. The Government of South Africa sold 20% of the issued share capital of ACSA to a consortium led by the Italian Aeroporti di Roma. The consortium also received an option to buy an additional 10%of the issued share capital. The Government intends to sell 10% of the capital to disadvantaged South Africans and 9% to ACSA employees and management. US firm White & Case advised the South African Ministry of Transport. Johannesburg-based partner Darryl Deaktor led the team. Also involved were partners Ron Goodman and John Janks, in Johannesburg, and David Eisenberg in London.