Big Five – Barings deadline looms

Barings auditor Coopers & Lybrand this week entered the last stage in its effort to persuade creditors of the crashed investment bank to accept #33m compensation.

The firm, which made the offer two years ago, has until the end of the year to convince creditors that further legal action will fail to win extra compensation.

The 31 December deadline was set under a settlement scheme brokered by the City Disputes Panel and liquidator Ernst & Young. It aims to settle all outstanding claims against Barings, its new owner Dutch bank ING and former directors and auditors.

The compensation is aimed at three groups of bond-holders, which will receive between 25% and 50% of the value of bonds held.

E&Y sought advice on Tuesday from the Lord Chancellor on whether further delays would scupper the deal.

A meeting of creditors, including Barings bondholders and preference shareholders, to agree a deal is due on 11 November.

Creditors have spent the last two years pushing Coopers, now part of PricewaterhouseCoopers, to increase its offer to #100m before a deal was struck.

Joint liquidators Maggie Mills and Alan Bloom refused to recommend the deal, Accountancy Age understands, but have instead put forward the compensation packages ‘without prejudice’.

Deloitte & Touche, which audited Barings’ Singapore office run by Nick Leeson before Coopers took over, is also believed to have contributed to the deal.

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