RBS Investors in $6 Billion Lawsuit Fight Ex-Lawyers Over Feesby
Former law firm for shareholder group petioned court over debt
RBS investors are suing bank over losses in 2008 share issue
A group of about 20,000 individuals and companies suing Royal Bank of Scotland Group Plc over losses from a 2008 share sale fell out with their former lawyers over unpaid fees in a dispute that ended up in an attempt to have the shareholder group declared insolvent.
London law firm Fladgate filed a petition to wind up its former client, the RBOS Shareholders Action Group Ltd., on May 24, court records show. The group hired new lawyers to replace Fladgate in July of last year.
“This was a minor issue about delayed payment, which is now no issue at all,” the group’s spokesman Conal Walsh, said today. “The money was paid and received in full by Fladgate.” He said the petition was now “a dead letter,” and provided documents indicating that the debt had been resolved.
A Fladgate spokeswoman declined to comment beyond saying that the petition will no longer be pursued. Fladgate’s fees of 510,000 pounds ($750,000) were divided into six installments and the final payment of 85,000 pounds wasn’t received on time, according to the firm’s court filing.
RBOS Shareholders Action is one of three groups of investors suing the bank for as much as 4 billion pounds, saying it failed to disclose its perilous financial situation before issuing new shares during the financial crisis. Former RBS officials including Chief Executive Officer Fred Goodwin, Chairman Tom McKillop, head of corporate markets Johnny Cameron and finance director Guy Whittaker are also named as defendants and may be called to testify during the trial.
The bank has repeatedly denied the allegations.
The lawsuit has been hampered by the large number of claimants, the presence of several different law firms representing them, and by the volume of RBS documents that need to be reviewed. In 2014, the bank was ordered to hand over details of investigations by U.K. and U.S. regulators into its near-collapse.
RBOS Shareholders has changed its legal team twice since filing the suit in 2013, according to Legal Business magazine. The trial may take place as soon as next year.
“We view Fladgate’s decision to issue as poor behavior from a law firm, but of no consequence,” Walsh said.
The cases are: John Greenwood v. Frederick Goodwin & Ors, High Court of Justice, Chancery Division, HC13F01247; Trustees of the Mineworkers’ Pension Scheme Ltd & Ors v. The Royal Bank of Scotland Plc, HC13D01192; Legal and General Assurance Society Limited v. The Royal Bank of Scotland, HC14F01714; Dorothy Kim Lamoureux v. The Royal Bank of Scotland Group Plc, HC14F01704