Saturday 24 March 2018

Bloxham liquidator given court nod to move against Morgan Stanley in UK

Bloxham was
Ireland's oldest
firm. It is now
Bloxham was Ireland's oldest stockbroking firm. It is now undergoing liquidation

Tim Healy

THE High Court has granted permission to the provisional liquidator of Bloxham stockbrokers to instruct lawyers in proceedings involving the company due to be heard by the English Courts later this month.

Ms Justice Mary Laffoy yesterday made an order allowing Kieran Wallace, who was appointed as provisional liquidator to Bloxham last week, to instruct lawyers for litigation against US bank Morgan Stanley.

One of the reasons Mr Wallace's appointment was sought was so that he could represent the company at that litigation and provide instructions to solicitors.

Yesterday, in an affidavit to the court, Mr Wallace said that Bloxham is involved in the UK action where Morgan Stanley are being sued for €20.5 million in claims from investors over the loss of almost all of their investment in the so-called Saturn bonds, provided by Morgan Stanley, sold by the firm.

Bloxham was joined to those proceedings by Morgan Stanley who are seeing an indemnity and a contribution from the Stockbrokers. Bloxham in a counterclaim are suing Morgan Stanley for an alleged breach of contract and for losses arising from having being exposed to claims by its clients.

That action is due to commence before the Commercial division of the English High Court on June 18 next.

Mr Wallace said that in the time since he was appointed as provisional liquidator to Bloxham, and after taking legal advice on the matter, he believed "there was merit in allowing Bloxham to continue in the English proceedings."

Arising out of the legal advice he received Mr Wallace said that continued participation in the English proceedings is more likely to advance the financial position of the liquidation.

Not taking part could result in a judgment being obtained against the company which would be extremely prejudicial to the winding up, he added.

It was anticipated that the legal fees incurred in the forthcoming trial would be in the region of £200,000 (e246,000). The sum due net of monies held on account in respect of legal fees for the case came to stg£114,000 (e140,000), the affidavit added.

Last week, Mr Wallace was appointed as provisional liquidator of Bloxham, which was Ireland's oldest stockbrokers, after the High Court was informed the company was insolvent and unable to pay its debts as they fell due.

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