Northern Rock shareholders will not receive compensation, says BDO

A BDO valuation expert has said shareholders of Northern Rock were unlikely to receive any compensation - after more than a year's work pricing up the banking giant which became the first major UK casualty of the sub-prime crisis.

In a consultation document released today, Andrew Caldwell valuations partner at BDO set out his provisional views on the valuation and on the amount of any compensation payable to former shareholders (and to those whose rights to receive shares were extinguished when Northern Rock was transferred into temporary public ownership).

"Based on the proposed method laid out in the consultation document, the Independent Valuer’s provisional view is that no compensation will be payable to former shareholders (and to those whose rights to receive shares have been extinguished," BDO said in a statement.

Andrew Caldwell, was appointed as the Independent Valuer under the Northern Rock plc Compensation Scheme Order 2008 on 8 September 2008.

The terms of the valuation were panned by shareholder action groups who claimed the criteria of the deal- to treat Northern Rock as if it was not a going concern and already in administration before the government stepped in to help with its £25bn bailout package-could only result in a zero return for shareholders.

The deadline for responses is 29 January 2010, BDO added.

Further reading:

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