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13/02/2009
Northern Rock Shareholders Lose High Court Bid
Former Northern Rock shareholders have today failed in their legal challenge to the Government's plan to compensate them.
The group - which included two hedge funds that owned almost 20% of the financial institution before it was taken into public ownership - argued that the government had deliberately undervalued the bank in the run up to its nationalisation.
Around 150,000 individual investors also joined to accuse the Treasury of seeking to profit at their expense.
In the High Court last month they said this had infringed their human rights, and meant they would receive no compensation.
The had argued that Northern Rock was still a valuable business when it was nationalised in February last year. While the Newcastle-based bank was being kept alive with loans from the Bank of England, this was a legitimate part of the Bank's role as the lender of last resort, the group said.
However, two high court judges, Lord Justice Stanley Burnton and Mr Justice Silber, rejected this argument.
Lord Justice Stanley Burnton, however, said the provisions made to compensate them "do not infringe their rights", but also granted the shareholders leave to appeal.
He added: "We have some sympathy with the position of the former long-term shareholders of Northern Rock, who doubtless believed they had invested in a reliable bank.
"Ultimately, however, they entrusted their investments to the hands of the management of the company."
He added: "As it turns out, their business plan was flawed and could not survive the unprecedented circumstances of the latter part of 2007."
Among the small investors were Northern rock customers who had received shares when the former building society demutualised a decade ago.
Two substantial hedge funds - SRM and RAB - as well as the Northern Rock Shareholders Action Group, and the Legal & General Insurance company also brought the judicial review.
Roger Lawson, head of the UK's Shareholders' Association, said although he was disappointed by the ruling, he added: "it's not totally unexpected".
See: Parliament Approves Northern Rock Nationalisation
(JM)
The group - which included two hedge funds that owned almost 20% of the financial institution before it was taken into public ownership - argued that the government had deliberately undervalued the bank in the run up to its nationalisation.
Around 150,000 individual investors also joined to accuse the Treasury of seeking to profit at their expense.
In the High Court last month they said this had infringed their human rights, and meant they would receive no compensation.
The had argued that Northern Rock was still a valuable business when it was nationalised in February last year. While the Newcastle-based bank was being kept alive with loans from the Bank of England, this was a legitimate part of the Bank's role as the lender of last resort, the group said.
However, two high court judges, Lord Justice Stanley Burnton and Mr Justice Silber, rejected this argument.
Lord Justice Stanley Burnton, however, said the provisions made to compensate them "do not infringe their rights", but also granted the shareholders leave to appeal.
He added: "We have some sympathy with the position of the former long-term shareholders of Northern Rock, who doubtless believed they had invested in a reliable bank.
"Ultimately, however, they entrusted their investments to the hands of the management of the company."
He added: "As it turns out, their business plan was flawed and could not survive the unprecedented circumstances of the latter part of 2007."
Among the small investors were Northern rock customers who had received shares when the former building society demutualised a decade ago.
Two substantial hedge funds - SRM and RAB - as well as the Northern Rock Shareholders Action Group, and the Legal & General Insurance company also brought the judicial review.
Roger Lawson, head of the UK's Shareholders' Association, said although he was disappointed by the ruling, he added: "it's not totally unexpected".
See: Parliament Approves Northern Rock Nationalisation
(JM)
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03 August 2010
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
Northern Rock Steadfast In Recovery
The boss of a once beleaguered UK bank is "encouraged" by news that nationalised Northern Rock's - a so-called 'bad bank' - has returned to profit following heavy losses last year in the wake of a bail-out by the taxpayer in 2008. Chief Executive Gary Hoffman said the Northern Rock 'AM' results were 'encouraging'.
15 January 2008
Northern Rock Shareholders' Proposals Defeated
An Extraordinary General Meeting with the Northern Rock board and shareholders at the Metro Radio Arena in Newcastle today has seen all but one of the proposals put forward by two shareholders defeated.
Northern Rock Shareholders' Proposals Defeated
An Extraordinary General Meeting with the Northern Rock board and shareholders at the Metro Radio Arena in Newcastle today has seen all but one of the proposals put forward by two shareholders defeated.
18 December 2007
Northern Rock Gets Taxpayer Billions
The Government is bailing out troubled bank, Northern Rock, again. At the request of the lender, it has offered to cover any loss by financial institutions that provide money to Northern Rock so the bank can operate normal banking services.
Northern Rock Gets Taxpayer Billions
The Government is bailing out troubled bank, Northern Rock, again. At the request of the lender, it has offered to cover any loss by financial institutions that provide money to Northern Rock so the bank can operate normal banking services.
18 May 2012
Northern Rock Rescue "Could Cost Taxpayer £2bn"
The National Audit Office (NAO) has estimated that taxpayers could lose almost £2bn once the assets of collapsed bank Northern Rock are wound down. The public spending watchdog also said that taxpayers lost about £480m on the sale of Northern Rock PLC last year.
Northern Rock Rescue "Could Cost Taxpayer £2bn"
The National Audit Office (NAO) has estimated that taxpayers could lose almost £2bn once the assets of collapsed bank Northern Rock are wound down. The public spending watchdog also said that taxpayers lost about £480m on the sale of Northern Rock PLC last year.
22 February 2008
Parliament Approves Northern Rock Nationalisation
Parliament passed legislation on Thursday that will allow the government to make Northern Rock PLC, the first sizable British bank to be nationalised in 25 years. On Thursday night, the House of Commons approved the nationalisation legislation by a margin of 126 votes.
Parliament Approves Northern Rock Nationalisation
Parliament passed legislation on Thursday that will allow the government to make Northern Rock PLC, the first sizable British bank to be nationalised in 25 years. On Thursday night, the House of Commons approved the nationalisation legislation by a margin of 126 votes.
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