Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Hedgie continues legal fight over Northern Rock nationalisation

Hedgie continues legal fight over Northern Rock nationalisation

An ongoing legal saga over the nationalisation of Northern Rock in 2008 will reach the Court of Appeal later this week, according to the Financial Times.

The paper reported that Harbinger Capital Partners, the Philip Falcone-founded hedge fund, which held an interest in £277 million preference shares in Northern Rock, is challenging a ruling made by the Upper Tribunal (tax and chancery) in 2011.

The earlier tribunal validated the decision of Andrew Caldwell, the independent assessor of Northern Rock, who was appointed by the Treasury to determine whether investors of the stricken bank should qualify for a pay-out.

Harbinger, a private investment firm specialising in event and distressed strategies, had been challenging the methodology used by Caldwell to assess that former preference shareholders should be paid £322.5 million.

At the Upper Tribunal hearing, the FT said Harbinger argued the valuer had ‘misinterpreted’ one of the valuation assumptions, the so-called ‘withdrawn assumption’, which requires the valuer to assume that all financial assistance provided by the Bank of England or the Treasury to Northern Rock had been withdrawn or taken away.

In court documents at the hearing, Harbinger had argued that the opening balance sheet surplus would mean that after a five-year rundown of the Northern Rock mortgage book or business in administration ‘there would be well in excess of £1 billion of net assets to be distributed to shareholders’.

In 2009 two hedge funds, SRM Global and RAB Special Situations, sued the government over the near-collapse of Northern Rock but had their claims thrown out by the High Court.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter