Tweet
Barclays settles Libor 'test case' weeks ahead of trial
Barclays signs a settlement with a care home operator weeks ahead of trial that would have seen current and former executives give evidence in a trial linked to lender's involvement in Libor-rigging
Barclays has avoided an embarrassing High Court trial over claims its senior executives were aware of attempts to rig Libor after reaching a multi-million pound settlement with a care home over the alleged mis-sale of interest rate derivatives.
Barclays has agreed a settlement with Guardian Care Homes worth about £40m to avoid a trial later this month that would have seen several current and former managers of the bank, including former chief executive, Bob Diamond, give evidence at the London High Court.
Graiseley Properties, the parent of Guardian, has dropped a claim against Barclays that had been described as a “Libor test case” just weeks ahead of the opening of the trial scheduled for April 29.
In a statement the company said: “In order to support the ongoing viability of Graiseley’s care home business, the parties have signed a restructuring of Graiseley’s debt. This reflects the impact of changes in conditions to the sector over the past few years. Graiseley has withdrawn the litigation.”
Barclays had been prepared to fight the case and is estimated to have run up a legal bill of at least £11m defending itself in what was expected to be a closely-watched trial with implications for potentially thousands of business sold complex interest rate derivatives by their lenders.
Before the settlement, which is understood to have been signed on Friday, the lawsuit had already seen 104 current and former Barclays employees named in documents linked to the case lose a court fight to keep their identities secret, as well as the revelation that an investment fund run by Barclays had benefited directly from lower rates of sterling Libor.
The trial would have seen Mr Diamond, former co-heads of Barclays’s investment banking arm, Rich Ricci and Jerry del Missier, former finance director Chris Lucas, as well as former traders and Libor submitters at the lender take the stand as witnesses to give evidence on their knowledge of the bank’s involvement in interest rate rigging.
The case led to the discovery of a new cache of potential evidence on the bank’s role in Libor manipulation that was not available to the authorities in the UK and US at the time of its original June 2012 £290m settlement.
Barclays had tried to have the Libor element of Guardian’s case ruled out and last year took the case to the Court of Appeal in an attempt to block the claims over the links between its involvement in rigging interest rates and the potential impact on interest rate swaps.
However, the court ruled against the bank in November and upheld Guardian’s right to use Libor-rigging as part of its claim that Barclays had improperly sold it a series of interest rate hedging products linked to loans taken out with the bank.
Despite that setback, Barclays had maintained that the case was “without merit” and said it intended to fight the claims. Barclays had countersued Guardian for £87m consisting of the repayment of loans taken out by the care home company as well as the cost of cancelling its interest rate swaps.
In February, Guardian hired US law firm Hausfeld LLP to represent it. Hausfeld, a specialist in large class action lawsuits, took the case on a no-win-no-fee basis, upping the ante ahead of the trial.
Three former Barclays employees, Peter Johnson, Jonathan Mathew, and Stylianos Contogoulas, have been charged by the Serious Fraud Office over allegations they were involved in attempts to rig interest rates.
http://www.telegraph.co.uk/finance/n...-of-trial.html
Barclays signs a settlement with a care home operator weeks ahead of trial that would have seen current and former executives give evidence in a trial linked to lender's involvement in Libor-rigging
Barclays has avoided an embarrassing High Court trial over claims its senior executives were aware of attempts to rig Libor after reaching a multi-million pound settlement with a care home over the alleged mis-sale of interest rate derivatives.
Barclays has agreed a settlement with Guardian Care Homes worth about £40m to avoid a trial later this month that would have seen several current and former managers of the bank, including former chief executive, Bob Diamond, give evidence at the London High Court.
Graiseley Properties, the parent of Guardian, has dropped a claim against Barclays that had been described as a “Libor test case” just weeks ahead of the opening of the trial scheduled for April 29.
In a statement the company said: “In order to support the ongoing viability of Graiseley’s care home business, the parties have signed a restructuring of Graiseley’s debt. This reflects the impact of changes in conditions to the sector over the past few years. Graiseley has withdrawn the litigation.”
Barclays had been prepared to fight the case and is estimated to have run up a legal bill of at least £11m defending itself in what was expected to be a closely-watched trial with implications for potentially thousands of business sold complex interest rate derivatives by their lenders.
Before the settlement, which is understood to have been signed on Friday, the lawsuit had already seen 104 current and former Barclays employees named in documents linked to the case lose a court fight to keep their identities secret, as well as the revelation that an investment fund run by Barclays had benefited directly from lower rates of sterling Libor.
The trial would have seen Mr Diamond, former co-heads of Barclays’s investment banking arm, Rich Ricci and Jerry del Missier, former finance director Chris Lucas, as well as former traders and Libor submitters at the lender take the stand as witnesses to give evidence on their knowledge of the bank’s involvement in interest rate rigging.
The case led to the discovery of a new cache of potential evidence on the bank’s role in Libor manipulation that was not available to the authorities in the UK and US at the time of its original June 2012 £290m settlement.
Barclays had tried to have the Libor element of Guardian’s case ruled out and last year took the case to the Court of Appeal in an attempt to block the claims over the links between its involvement in rigging interest rates and the potential impact on interest rate swaps.
However, the court ruled against the bank in November and upheld Guardian’s right to use Libor-rigging as part of its claim that Barclays had improperly sold it a series of interest rate hedging products linked to loans taken out with the bank.
Despite that setback, Barclays had maintained that the case was “without merit” and said it intended to fight the claims. Barclays had countersued Guardian for £87m consisting of the repayment of loans taken out by the care home company as well as the cost of cancelling its interest rate swaps.
In February, Guardian hired US law firm Hausfeld LLP to represent it. Hausfeld, a specialist in large class action lawsuits, took the case on a no-win-no-fee basis, upping the ante ahead of the trial.
Three former Barclays employees, Peter Johnson, Jonathan Mathew, and Stylianos Contogoulas, have been charged by the Serious Fraud Office over allegations they were involved in attempts to rig interest rates.
http://www.telegraph.co.uk/finance/n...-of-trial.html
Comment