PracticeConsulting‘Vultures’ force E&Y to quit Barings

'Vultures' force E&Y to quit Barings

Ernst & Young's resignation as liquidators of Barings Bank was prompted by pressure from US bond holders, according to the Big Five partner who led the team.

Alan Bloom told AccountancyAge.com ‘The US bond holders asked us to stand down in May but we resisted.’

He explained that since then, the bond holders, vulture funds who bought Barings’ debts, have acquired the rest of the bonds. Bloom said they were now the only party with economic interest in the Barings liquidation and, as result, there was ‘no reason’ for E&Y to stay on.

The case will be taken over by KPMG insolvency practitioners. In a press release, E&Y said that its liquidators would work with KPMG to ensure a smooth transition.

E&Y was due to appear in the High court on 2 October to claim Pounds 1bn for Barings’ creditors from Coopers & Lybrand and Deloitte and Touche, the former auditors of the merchant bank. The case will still go ahead. The hearing was originally due to take place in June, but was adjourned in hopes that a settlement would be reached.

Concerns had arisen that E&Y may not have had enough funds to cover the legal costs if Coopers, now part of PricewaterhouseCoopers, and Deloittes successfully defended their positions.

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E&Y resigns from Barings case

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