Talks to avert RBS court case to continue into June
Attempts to avert a legal battle that would force the former Royal Bank of Scotland chief executive Fred Goodwin to give evidence in the high court are to continue into next month.
The £520m compensation claim brought by 9,000 retail investors and a handful of major institutions alleges that Goodwin, three former directors and the bank misled them into buying shares during a £12bn cash call in April 2008.
Granting an adjournment of the case to 7 June, the judge also set a deadline of 1 June for him to be informed of any agreement over the £200m settlement being offered by RBS.
“We must have certainty one way or another,” Mr Justice Hildyard told the court.
The case had been due to start in central London on Monday and the judge has already granted two 24-hour adjournments to allow shareholders to thrash out a deal with RBS, which made a last-minute settlement offer just before the case was due to begin.
Asked by Hildyard what the impediments to a deal were, Jonathan Nash QC for the claimants said the shareholder group was not able to contact all its members. There were a “small number of shareholders whose current address does not appear to be correct”, Nash said.
Nash told the judge that while prospects of a settlement remained good, more time was needed. He said he remained hopeful that it would be possible to reach a deal, blaming “logistical problems”.
The RBS crisis: a timeline of events
Read moreNash had told the court on Tuesday the majority of the shareholders were minded to settle but by the end of that day there was no announcement amid a disagreement among some of the private investors who wanted to reject the offer.
Some 15% of the group of investors who have yet to agree a settlement have died, 35% are pensioners, and 20% live abroad, according to court documents reported by Bloomberg.
The bank has settled with 87% of the shareholders who brought claims relating to the 2008 rights issue, which took place six months before its £45bn taxpayer bailout.
RBS has nearly doubled its offer to the remaining group. While the terms have not been confirmed it is thought the investors in the high court are being offered 82p a share – worth about £200m – compared with offers in the region of 42p agreed with the others.
Goodwin has been scheduled to give evidence for two days from 8 June – the first time since February 2009 that he would be forced to account for this actions at the helm of RBS. Eight years ago, when he appeared before the MPs on the Treasury select committee, he offered a “profound and unqualified apology for all of the distress that has been caused”.
The bank’s legal bills are expected to reach £125m if the case goes through the courts, while the investors’ legal bills are in part being paid by the businessman Trevor Hemmings. There have been reports that Hemmings, owner of Preston North End football club, is willing to accept the RBS offer, but they have not been confirmed.
RBS has not accepted liability during previous settlements for investors. It has set aside £800m for these cases but has said consistently it will defend itself in court.