Clifford Chance LLP has disclosed that the economic downturn may force it to lay off up to 8 percent of the lawyers currently at its London office, the third round of layoffs at the firm in the past year or so, Bankruptcy Law360 reported. “Our clients and their legal services needs have undergone significant change over the past year,” said Jeremy Sandelson, London regional managing partner. “We need to reflect that in the London office, and that includes ensuring that our level of staffing is appropriate for today's economic realities.

Litigators from the London office of Weil, Gotshal & Manges have been retained by Kaupthing bank for an expected civil suit against the British government, The AmLaw Daily reported. The Reykjavik-based bank, which was nationalized in October, claims that it collapsed because U.K. authorities forced its British subsidiary into bankruptcy at the height of the banking crisis. Read more.

Russia's gas price dispute with Ukraine escalated Tuesday, disrupting deliveries to the European Union in the midst of a bitter cold spell, with a number of countries reporting that gas supplies had been suspended or reduced, and Germany predicting a possible shortage, the International Herald Tribune reported. Bulgaria, Romania, Croatia, Macedonia, Turkey, Greece, the Czech Republic and Austria reported that gas supplies had been suspended or reduced after Gazprom, the Russian gas monopoly, reduced gas shipments through Ukraine.

Japan's Sony Corp is likely to announce closures of Japanese factories and major divisions early next month, the Times of London said on Monday, but the company denied any such plan existed. The maker of Bravia flat TVs and PlayStation video game consoles faces halting sales and mounting piles of inventory in the wake of the financial crisis, even as a stronger yen bites into earnings.

Oilexco Inc., a North Sea producer of oil and gas, lost more than half its market value in London trading today after saying its U.K. subsidiary was likely to file for insolvency administration as early as next week, Bloomberg reported. Calgary-based Oilexco North Sea Ltd. has been informed by Royal Bank of Scotland Group Plc that lenders aren’t prepared to provide further financing, Oilexco said today in a statement. The unit “does not have any other source of funding,” it said, adding that the parent company “remains solvent.” Oilexco hired Morgan Stanley and Merrill Lynch & Co.

Denton Wilde Sapte LLP has landed a dual role on the administration of London Scottish Bank, the latest financial institution to apply for administration after entering financial difficulties. The firm is advising Ernst & Young, who have been appointed as administrators, as well as representing the Financial Services Compensation Scheme (FSCS) which will be involved in paying compensation to certain customers of London Scottish Bank.

Reed Smith LLP on Wednesday became the latest firm to announce significant layoffs, saying that it plans to ax 115 support staff in its U.S. offices and up to 11 associates in the U.K, Bankruptcy Law360 reported. In a firmwide memo, Reed Smith said the layoffs were the result of the continuing slowdown of the economy and reduced demand for the firm's services. The layoffs represent less than 4 percent of Reed Smith's total work force. The 115 layoffs were spread across the firm's 15 U.S.

U.K. fund manager New Star Asset Management Group's shares plummeted 43% Monday after the company disclosed that it is holding talks with its bank lenders, The Wall Street Journal reported today. The discussions likely revolve around trying to organize a debt-for-equity swap to help stabilize the highly leveraged firm, a person familiar with the matter said. The company sought to have trading of its shares temporarily suspended Monday as it delivered the potentially gloomy news, but U.K. regulators denied the request.

The administrator for failed lender London Scottish Bank (LSB) on Tuesday said many potential buyers had expressed interest both in the company as a whole and in its profitable debt collection unit, the International Herald Tribune reported today. Accountants Ernst and Young was appointed as administrator for LSB on Sunday after the Financial Services Authority intervened to prevent the bank from accepting deposits because of a shortfall in its regulatory capital.

Insolvency law will be reformed to address a serious concern over the safety of money held with London investment banks which has sprung up in the wake of the collapse of Lehman Brothers, the Financial Times reported yesterday. The government will take a special power in the banking bill that is going through parliament to bolster the protection for client money and assets held in investment companies. A review of the insolvency regime for investment banks will be conducted by next summer, ahead of a full formal consultation on the draft legislation.