Lloyds shareholders who are suing the bank over its takeover of Halifax Bank of Scotland in 2008 have won an important court victory over legal advice documents.
The group of 6,000 investors, who all held Lloyds TSB shares at the time of the takeover, is taking action over £350m worth of losses sustained after the deal and have been demanding to see documents relating to the buyout.
The judge presiding over the High Court action dismissed arguments from Lloyds's legal team that documents relating to the advice received should be subject to legal privilege, the Belfast Telegraph reports. Directions are expected on the passing over of files today.
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Lawyers acting on behalf of the investor group, made up of small investors as well as larger institutions, including the pension funds of the National Farmers Union and the London Borough of Kensington and Chelsea, have also demanded to see communications with regulators, the then Financial Services Authority, the Bank of England and the Treasury.
The Daily Telegraph says the investors are seeking to recover losses of around £1 per share from the taxpayer-backed bank relating to the buyout of stricken Hbos. According to The Guardian, they claim they were not properly informed about the parlous state of the bank's finances and in particular lifelines worth £25.65bn and $18bn (£12bn) provided by the Bank of England and the US Federal Reserve, and a £10bn loan facility from Lloyds.
Had they been informed they say they may not have voted in favour of a deal which was approved by 99 per cent of shareholders at the time. Along with the bank itself, the claimants have named former Lloyds chairman Sir Victor Blank, ex-chief executive Eric Daniels and former directors Timothy Tookey and Helen Weir in the case.
The court action has begun just days after a long-awaited report into the collapse of Hbos in 2008 was delayed again amid a fresh round of 'Maxwellisation', the process by which those criticised in an official report are allowed to make representations prior to publication.
The Financial Times says regulators cited 1,425 representations from 35 individuals who were criticised. When these were incorporated into the report it resulted in fresh criticisms that have prompted further representations to be sought. The Treasury Select Committee has now pledged to investigate the ongoing delays.
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