Big Six - Coopers pays bondholders
Barings auditor Coopers & Lybrand is set to pay an undisclosed sum believed to be over #40m to help cover losses incurred by the bank’s bondholders following its collapse in 1993.
The payment has been put forward by the firm as part of a #190m deal put together by the city disputes panel, which was asked by the bank’s liquidators Ernst & Young to strike a deal between warring parties over two years ago.
The deal upset shareholder groups which were excluded from the payout after the panel decided there was a lack of funds to cover all groups affected by the crash. Representatives of the preference shareholders vowed to contest the deal when it is brought back to court later this year.
Dominic Hopkins, a solicitor with Hewitson Becke & Shaw which is representing a shareholder action group, said Coopers could be forced to pay more if its court actions were successful. ‘We could stop the whole thing going ahead because the court must sanction the compromise that the panel has worked out,’ he said.
Ernst & Young this week fought off an $850m (#530m) claim by the liquidators of BCCI, Deloitte & Touche, after Mr Justice Laddie ruled in the High Court that it ‘would represent a radical extension of the liabilities shouldered by an auditor.’ E&Y is still facing claims of $2.7bn related to the collapse of BCCI.