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Northern Rock shareholders continue legal fight

A group of Northern Rock shareholders have today taken their fight back into the courtroom in an attempt to overturn a recent ruling which suggested the UK government was able to value the business as if it was in administration prior to nationalisation. The group of shareholders, which includes SRM Global and RAB Capital, has constantly argued that the business was still a going concern just prior to the nationalisation by the government and compensation should be paid to shareholders.

The attempt to overturn the earlier ruling is based upon the fact that the Bank of England had stepped forward with a significant funding programme for Northern Rock, something which the shareholders believe would not have happened if it was not "a going concern". Even if the ongoing court case in UK is lost, it is believed that the fight will go all the way to the European Court of Human Rights where the rights and obligations of shareholders and governments will come under the spotlight.

This comes at a time when the UK government is apparently looking at the possibility of selling Northern Rock and disinvesting the taxpayers holding in the company. Whether any further legal action will delay a potential sale of the business remains to be seen.

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