Insolvency - Stoys concede Polly Peck claim

BDO Stoy Hayward last week paid #26m to settle negligence claims brought by Polly Peck International’s joint administrator Deloitte & Touche.

Deloittes originally sought more than #240m from Stoys, which denied negligence in its auditing of PPI. Until the surprise settlement was revealed last Friday, Stoys had contested the case energetically. The prospect of expensive litigation, however, may have encouraged its insurers to settle.

A Deloittes spokesperson said there was a confidentiality agreement preventing the firm from confirming the sum, but said the action against Stoys had been settled, ‘resulting in additional funds becoming available for creditors’.

Deloittes’ Christopher Morris was appointed to the PPI liquidation team to investigate other avenues and sources of redress, while Chris Barlow of PricewaterhouseCoopers was responsible for recovering assets from Asil Nadir and other PPI directors.

To date, the PPI liquidators have made two dividend payments, totalling #23m, against admitted claims of #1.7bn. Barlow was ‘pleased’ with the agreement and said: ‘Clearly the settlement of litigation and the prospect of future asset realisations will lead to a future dividend.’

Barlow said PwC was making progress on realising more of the assets, which included a company in Turkey, a sum of money in New York and a shareholding in Japanese electronics firm Sansui.

Some of Nadir’s assets in Cyprus had been realised, but the proceeds remained subject to claims brought by Greek Cypriot interests, said Barlow.