Shareholders plan Northern Rock appeal

northern rock

Shareholders of
Northern Rock are
considering taking their case to the European courts after a High Court judge
refused to redraw the rules governing the valuation of the collapsed bank.

BDO Stoy Hayward
has been paid a flat fee of £4.5m to put a price on Northern Rock, which was
nationalised last year. Valuations expert Andrew Caldwell is spearheading the
firm’s efforts.

Roger Lawson of the Northern Rock Shareholders Action group said: ‘This case
is so blatantly unfair that we want to push it all the way. There will almost
certainly be an appeal and we are prepared to go to the European courts.’

Last week shareholders, led by hedge funds SRM Global and RAB Capital, saw
their argument to have Northern Rock treated as if it were a going concern – and
not in administration before the government stepped in – rejected.

Lawson added: ‘In accounting terms, Northern Rock was never bust. The ruling
makes a nonsense of financial principles.’

The judicial review pitted the Treasury against investors looking to salvage
what they regard as a suitable level of compensation.

A BDO spokeswoman said: ‘The valuer is requesting and obtaining information
relevant to the valuation process. The outcome of the court case means the
valuer will continue to make the final decision on the value of shares in
accordance with the Northern Rock plc Compensation Scheme Order.’

Related reading

PwC office 2