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HBOS pension trustees go to court to block merger

As we covered just a few days ago, the trustees of the HBOS pension scheme have today taken their battle to the courtroom asking a judge to delay the banks merger with Lloyds TSB. They have requested a new valuation of the company's pension scheme amid claims that the deficit has exploded from £95 million to £5 billion. If this is the case it could take some months for both sides to agree a way forward and any additional funding in the future.

While the HBOS pension trustees have an obligation to protect their members there is concern that further delays in the merger could impact upon the companies competitiveness and ability to attract new business. Despite shareholders from both parties voting in favour of the move this has been one of the most protracted mergers in UK history.

If the deal was to fall apart at the 11th hour this could have serious implications not only for HBOS and Lloyds TSB but the UK banking sector as a whole. The government has also been backing the merger all of the way and a failure to conclude the deal at this late stage would be a major embarrassment.

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