The £1bn court action brought by liquidators Ernst & Young on behalf of creditors against the former auditors of the collapsed Barings Bank, could still be settled out-of-court as predicted by Accountancy Age last week.
On Friday afternoon PricewaterhouseCoopers, formed by the 1997 merger between Pricewaterhouse and former Barings auditors Coopers & Lybrand, applied with E&Y to the High Court for an eleventh-hour stay.
The court has given the Big Five firms seven days.
Co-defendant Deloitte & Touche said it knew nothing about the postponement or what was being proposed.
‘We remain confident in our position and assume the trial with still go ahead,’ said a spokesperson for Deloittes.
The case focuses on how the trading activities of Nick Leeson, which brought the bank to its knees in 1995, went undiscovered by the auditors. Deloittes which audited Barings in 1992 and 1993 maintains it met its obligations as auditor.
Coopers & Lybrand Singapore replaced Deloittes as auditors of the bank in 1994 with the UK firm auditing Barings’ group accounts. It has been widely expected that PwC would seek a settlement due to the spate of bad publicity the Big Five firm has received from its auditing of Robert Maxwell’s companies.
E&Y are also facing court action from a US group of creditors seeking to replace the firm with KPMG as liquidators adding another layer of complexity to the case.
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