Northern Rock shareholders lose their legal battle
A group of former Northern Rock shareholders have today been forced to admit defeat in their pursuit of the UK government and the "fair" compensation package for their shares. They argued that the fact the UK government had already placed a "value" on Northern Rock's value prior to nationalisation, infringing their human rights. The High Court judges who heard the case against the government ruled that even though the government had placed a value on the company before taking it under government control there was no infringement of human rights.
A firm of accountants employed by the government are at this moment in time trying to assess what the company was worth prior to nationalisation and what level compensation for shareholders should be pitched at. There is intense speculation that many shareholders will receive nothing as the government looks set to paint the most depressing picture of all.
In a frightening development today it appears that Lloyds bank shareholders are to be in a very similar situation to those of Northern Rock with the revelation of a £10 billion write-down from newly acquired HBOS. This has the potential to undermine the UK banking sector in the short to medium term with investors now "running scared".
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