Nationwide wins bid to dismiss UK bondholder lawsuit
Published 24/11/2010 | 14:27
Irish Nationwide Building Society won a bid to have a lawsuit filed by two subordinated bondholders seeking the liquidation of the nationalised property lender thrown out.
The bondholders, Satinland Finance and Trimast Holding, didn’t have a valid claim, Judge George Mann said in his ruling today at a London court.
The investors are seeking to force a BNP Paribas unit, the debt program trustee, to file a winding-up petition against Irish Nationwide.
The investors sued after Irish Finance Minister Brian Lenihan said September 30 that holders of subordinated bonds would be expected to share in the cost of bailing out Irish Nationwide and Anglo Irish Bank, the country’s two nationalised lenders.
The Government has committed €5.4bn to rescue Irish Nationwide, as losses mounted amid surging bad loans.
The case was “bound to fail,” Judge George Mann said. “This was not, in my view, a promising action at all.”
A lawyer for the bondholders, Neil Calver, declined to comment after the ruling.
Satinland Finance and Trimast Holding, which hold 25.6pc of Irish Nationwide’s 13pc lower Tier 2 bonds due 2016, filed the lawsuit against the lender and BNP Paribas Trust, the trustee for its subordinated bonds. Irish Nationwide asked for the case to be dismissed at a hearing last week.
In a statement after the lawsuit was filed, Irish Nationwide said no event of default has occurred and the terms of the bonds are being honoured. The lender said it would “vigorously defend the proceedings.”