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UK law firm behind move to have Nationwide wound up

English law firm SJ Berwin is behind the petition to the have Irish Nationwide Building Society wound up, the Irish Independent learnt yesterday.

The firm is representing two unnamed holders of subordinated bonds. The winding-up proceeding is the first legal step in seeking to have a company placed into liquidation by creditors, under English law.

Most Irish Nationwide subordinated bondholders have not backed the petition.

A spokesman for Russian billionaire Roman Abramovich's Millhouse fund said it was not behind the case. Millhouse previously threatened legal action over the plan to impose burden sharing on subordinated bondholders.

A larger group of Irish Nationwide subordinated bondholders being advised by law firm Bingham McCutcheon is also not involved in the case.

SJ Berwin took the case in the English courts because UK rules give enormous power to lenders, if a court can be convinced a borrower is in default. London-based lawyers said Irish Nationwide could fall under the jurisdiction of the English courts.

The building society has branches in Belfast and London, many of its creditors are based in London and its bonds were issued under English law. That could be enough of a legal connection for a case to proceed.

Even so, Irish Nationwide says the bondholders have no case to bring. It says bondholders have not suffered any losses and the borrower has not missed interest payments.

The Government has offered 20pc of face value for similar Anglo Irish Bank subordinated bonds.

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