View the article online at http://citywire.co.uk/money/article/a645239
Sir Keith Mills settles with Coutts over AIG bond dispute
Sir Keith Mills has agreed to settle with Coutts & Co, as the case he brought against the bank after his personal fortune was locked up in AIG life bonds, was finally closed.
Sir Keith Mills has agreed to settle his claim with Coutts & Co, bringing an end to a battle with the Queen’s bank over the sale of AIG life bonds.
Mills, who set up the Nectar card and Air Miles loyalty schemes, has agreed to settle with the bank for an undisclosed sum.
While the terms of the agreement have not been disclosed, previous reports suggested Mills was seeking damages in excess of £8 million.
Coutts said in a statement it was pleased to have come to an agreement with Mills.
'We confirm that we have reached a mutual settlement with Sir Keith Mills and are pleased to have resolved this issue,' a spokesperson said.
The case was brought to the High Court in London's Strand after Mills invested £65 million of his personal wealth plus £8 million from a family trust in AIG bonds.
Coutts sold the AIG Variable Enhanced Rate fund to 427 clients who had a combined £1.45 billion invested in the fund between December 2003 and September 2008.
As the Lehman's crisis unfolded, AIG shares took a sharp fall, causing a run on the fund. The value of the underlying investments in the fund were also badly hit by the events of 2008, and the vehicle was suspended in September of that year.
Some 247 clients, including Mills, saw their assets frozen within the fund. At the time clients were given the option to withdraw 50% of their capital and have the remaining 50% transferred into the new AIG Protected Recovery fund (PRF) to avoid a 13.5% haircut.
Investors that opted for the PRF rollover then saw their cash locked up in the vehicle for over three and a half years.
Mrs Justice Aspley said she was 'extremely grateful' for the conduct of both parties during the case, though Mills was not present in court to hear news of the settlement read out.
Just over a year before this afternoon's hearing the Financial Services Authority (FSA) imposed a £6.3 million fine on Coutts for failings in the way it sold the AIG Enhanced Variable Rate fund.
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In association with Aberdeen Asset Management
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- Sky News
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by Gavin Lumsden on Mar 07, 2014 at 18:53