HSF takes lead for Lloyds as more than 5,000 investors sign up to group lawsuit
Herbert Smith Freehills will go up against private client boutique Harcus Sinclair as thousands of investors in Lloyds Banking Group prepare a class action-style lawsuit claiming the 2008 government takeover of HBOS left them £400m out of pocket.
November 10, 2014 at 07:51 PM
2 minute read
Herbert Smith Freehills will go up against private client boutique Harcus Sinclair as thousands of investors in Lloyds Banking Group prepare a class action-style lawsuit claiming the 2008 government takeover of HBOS left them £400m out of pocket.
The original claim launched by a group of around 200 investors has now been joined by more than 5,000, who allege that they were kept in the dark about emergency support packages the bank received from both the Bank of England and the US Federal Reserve.
The claimants, who are acting under a group litigation order, argue that the withholding of information led them to approve the financial crisis merger between Lloyds and HBOS.
Lloyds' defence is set to be filed by the end of the year, while a trial could start in 2016 at the earliest. Investors have until a 19 November deadline to join the claim.
Herbert Smith disputes partner Damien Byrne-Hill is leading the firm's team advising Lloyds
Harcus Sinclair's head of litigation Damon parker is taking the lead for the shareholder group, who have also named Sir Victor Blank, the bank's former chairman, and Eric Daniels, its former chief executive, as defendants.
19 November marks the sixth anniversary of the extraordinary general meeting at which Lloyds sharholders approved the HBOS takeover, but Harcus Sinclair is encouraging claimants to register before the 14th, and will not be taking registrations on the 18th.
A Lloyds Banking Group spokesperson said: "The Group's position remains that we do not consider there to be any legal basis to these claims and we will robustly contest this legal action."
The case has drawn comparisons with a £4bn group claim brought by former shareholders last year against RBS and some of its former directors over a 2008 rights issue. Herbert Smith is also acting for RBS and the directors on that case, who include former chief executive Fred Goodwin.
Banks have recently set aside additional legal spend as they report third quarter earnings. RBS has made a £400m provision to cover potential legal costs from an ongoing investigation in foreign exchange market rigging, following on the heels of Citigroup, JPMorgan and Deutsche Bank, who have put away a combined total of more than $1.5bn (£940m).
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