The auditors of collapsed bank Barings may yet reach a settlement with creditors ahead of a £1bn High Court battle, scheduled to start on June 18.
Liquidators at Ernst & Young are suing auditors Coopers & Lybrand, now merged into PricewaterhouseCoopers, and Deloitte & Touche Singapore, for #1bn for negligence to cover the £800m lost by rogue trader Nick Leeson.
But industry observers told Accountancy Age this week that if a settlement were to be reached it would have to be within the next fortnight before the trial kicks off.
Otherwise ‘there will be a huge downside due to the publicity from the opening statements’, said one commentator.
PwC, which has already had acres of newsprint devoted to its role in the collapse, could favour a deal to save itself from further months of negative publicity.
Liquidator Alan Bloom, head of corporate restructuring at E&Y, told Accountancy Age this week: ‘We’re here. And always open for defendants to approach us in legal action. But, we’re very confident, otherwise we wouldn’t have taken (the case) to this point.’
Coopers and Deloittes also emphasised their readiness to fight the case in court.
Preliminaries are expected to last until the end of July, but the main part of the case will not begin until October. Coopers is also set to face an accountants’ Joint Disciplinary Appeals Tribunal in September after the firm lodged complaints against the findings of a tribunal on its role as auditor of Barings Bank.
Meanwhile in Singapore, a Public Accountants Board hearing against partners of Coopers & Lybrand and Deloitte & Touche Singapore has just ended, with its findings keenly awaited.
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