Court to get update on efforts to resolve RBS legal action
- Author: Zachary Reyes May 25, 2017,
May 25, 2017, 6:18
A judge ruled that the Royal Bank of Scotland (RBS) has until July 1 to come to a settlement with shareholders and avoid a trial over the bank's almost $16 billion cash call during the financial crisis in 2008.
The high-profile trial was due to start on Monday but has not got off the ground because of progress being made in on-going negotiations between the claimants and the bank.
Investors allege that RBS, under Mr Goodwin's leadership, misled them about the state of the bank's finances when it raised billions of pounds from them just months before it had to be rescued.
Judge Robert Hildyard has given RBS and Investors until June 1 to notify him if a deal had been agreed to avert court proceedings.
The talks between RBS and investors are being held to prevent the case being heard in the High Court and release ousted former RBS executive, Fred Goodwin from giving evidence in his scheduled trial on June 8.
The judge was told on Wednesday that progress towards a settlement of the action remained "good".
The judge set a court hearing for 4pm on Thursday for an update and will require written updates next Tuesday and Thursday when the court is not sitting.
Sources, however, told Reuters late yesterday that a number of shareholders in the 9,000-strong group suing RBS remained determined to reject its offer and take the case to trial.
The shareholders' barrister Jonathan Nash QC said yesterday: Tthe present position is that the majority of claimants have indicated their willingness to accept the latest offer from the defendant'.
The bank, which is 70% state-owned, has denied any wrongdoing.
He said today that it would be "fundamentally wrong" for the legal action to continue if some of the investors could not be contacted and sought assurances from Mr Nash that there were only logistical problems, and not "structural and systemic difficulties", in reaching shareholders.
Shares of Royal Bank of Scotland Group PLC (NYSE:RBS) traded up 0.43% during mid-day trading on Friday, reaching $6.96.
The investors are making their claim for compensation from RBS, Goodwin and three former directors of the bank at the time of the cash call, which was made six months before the bank's taxpayer bailout.