A last-ditch settlement deal between Barings’ liquidators and Coopers & Lybrand, co-auditor of the former merchant bank, could halt the multimillion pound court case over its collapse, say experts.
Lawyers for Coopers, now PricewaterhouseCoopers, and liquidators KPMG brokered a last-minute deal on Tuesday – days after the #1bn negligence claim against the auditors reached London’s High Court.
The issue of whether a streamlined case will proceed with just one defendant, Coopers’ fellow Barings auditor Deloitte & Touche, was in the balance as Accountancy Age went to press. A source said: ‘There’s a chance of abandoning the case. Deloittes has very much played hard ball.’
Deloittes, whose potential exposure is significantly less than that of Coopers because of the smaller role it played in audits of Barings, has not been involved in settlement talks since a failed attempt by the City Disputes Panel in 1998. Deloittes has said it will only settle for a nominal sum.
A spokesman for PwC said: ‘I can confirm the UK and Singapore firms of Coopers & Lybrand have agreed a settlement with liquidators. The terms of settlement are confidential and subject to court approval in due course.’
It will be difficult to convince the court that Deloittes alone is to blame for the merchant bank’s collapse in 1995. It may also mean creditors will be less willing to put forward the #19.5m in securities cost demanded by court.
A KPMG spokesman said he could not make any official statement due to ongoing legal proceedings. Deloittes said it would be unwise to comment until it had complete details. The amount recovered in the deal would have to be revealed at a creditors’ meeting.
Barings analysis, pages 12-13.
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