Jump to content
House Price Crash Forum

Rock Carpetbaggers To Sue Darling This Week


Recommended Posts

0
HOLA441

http://www.telegraph.co.uk/money/main.jhtm...2/cnrock102.xml

Northern Rock investors fire starting gun on lawsuits

By Louise Armitstead and Jonathan Sibun

The biggest investors in Northern Rock are this week expected to launch a multi-faceted legal action against the Government, regulators and individuals over the collapse of the now-nationalised bank.

SRM Global and RAB Capital, which own a total of 20 per cent of the Newcastle-based bank, are finalising tactics with their legal teams which could include suing Chancellor Alistair Darling and the governor of the Bank of England, Mervyn King.

Jon Wood, head of SRM, the biggest shareholder in Northern Rock, told The Sunday Telegraph: "We have known for a long time that nationalisation was an option and we have been prepared for it. We are expecting to file by the end of the week. We haven't decided whether to name individuals though we certainly plan to call them as witnesses."

Wood, who said he is prepared to take the action to the European courts, added: "The tripartite caused significant problems for the bank, then they stole it from us and now they want to decide compensation. This is commercial vandalism."

Legal & General and Hermes, two of Britain's biggest pension fund managers and also shareholders in Northern Rock, are also thought to be considering legal action against the Government. A source said the fund managers are "examining their options" and have spoken to lawyers. So far the traditional managers have not publicly come out against the decision to nationalise Northern Rock.

Experts have said the obvious charges the investors can pursue are challenging the Government's valuation of their shares; bringing a "misfeasance" claim against the Chancellor; and suing for expropriation of property under European law. Even so, they could still struggle to prove the Government acted in bad faith, or that Northern Rock's shares are worth more than the price set by the compensation committee.

Investors are seeking compensation for shares at the level they were trading before the crisis emerged. But it is complicated given that Northern Rock was trading over 600p and then dropped to 400p before confirmation it had sought emergency funding from the Bank of England. The shares were suspended at 90p but it is thought compensation would be set even lower.

A small shareholder group, thought to represent a collection of 25 per cent of the shares, has also appointed lawyers.

Separately, the Government is also facing attack from Northern Rock's preference shareholders, whose £400m stake could be wiped out by nationalisation. Preference shares offer greater protection than is afforded to ordinary shareholders. That means that if shareholders receive any payout from the Government in lieu of their holdings in Northern Rock, preference shareholders should be paid back in full.

This made me chuckle;

Jon Wood, head of SRM, the biggest shareholder in Northern Rock, told The Sunday Telegraph: "We have known for a long time that nationalisation was an option and we have been prepared for it.
A long time? What, like before you bought the shares hoping to cash in on a rescue deal, "long time"? Idiot.

[edit; love the auto-correct profanity option on this forum software!]

Edited by Paddles
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information