FBD division pursued as part of €10m in lawsuits over bond sale
Published 26/01/2010 | 05:00
A DIVISION of FBD is being pursued for 'joint and several' liability in almost €10m worth of lawsuits being taken against stockbrokers Bloxham.
FBD Securities is an 11.6pc shareholder in Bloxham, which has been hit with two sets of court proceedings alleging negligent advice relating to the sale of a bond that shed more than 97pc of its value.
The Solicitors' Mutual Defence Fund is pursuing the €8m losses it suffered on the bond, while two prominent lawyers are taking a separate case, claiming losses of more than €1.4m on the same investment.
The Irish Independent has learned that the plaintiffs in both cases are pursuing a joint and several finding, asking for each of Bloxham's owners to be individually held responsible for the €10m should the courts find in their favour.
Asked about the impact of a joint and several finding, a spokesman for FBD last night stressed that FBD Securities was a "limited partner in the brokerage".
"As this matter is before the Commercial Court, we are not in a position to comment further," he added.
It is understood, however, that FBD will use the "limited" structure of its Bloxham investment to argue that its liability should be capped at its 11.6pc share of the broker, should the issue of joint and several liability arise.
The most recent accounts for FBD Securities showed the firm had assets valued at just under €3m at the end of 2008, entirely comprised of unquoted investment held at cost.
The company booked pre-tax losses of almost €640,000 that year, substantially better than the almost €6.2m lost in 2007.
FBD recently admitted it expected about €8m to €9m in claims arising out of the November floods, depressing earnings per share by between 21c and 24c. At the time, the company said it expected full-year earnings per share to come in between 75c to 80c when it reports on March 3, "barring further exceptional claims".