Northern Rock shareholders are unlikely to receive any compensation
A report by BDO Stoy Hayward on behalf of the UK government has ruled that Northern Rock shareholders, prior to the company being nationalised, should receive no compensation for the loss of their shares. The company believes that Northern Rock had a deficit of around £5.68 billion just prior to the transfer to government ownership therefore leaving no net funds for distribution to shareholders at the time.
This is a situation which has been ongoing for some time with many prominent Northern Rock shareholders of the opinion there should be some kind of compensation payment from the UK government. There have been many arguments as to when the company's balance sheet should have been frozen, prior to nationalisation, and what exactly was held at the time of the move to government ownership.
While this particular report has now been "put out for consultation" with a final ruling expected sometime next year, the signs are that former Northern Rock shareholders are unlikely at this moment in time to receive any form of compensation from the UK government. However, with some of the largest and most powerful investment names behind the ongoing court case for compensation it is unlikely that the saga will end here.
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