$150m lawsuit over Barings bonds

Two rival sets of Barings bondholders are gearing up for a High Court confrontation over a $150m "pot" left over from the merchant bank's collapse which both claim is theirs.

The two groups have already fought legal actions in the UK and the Netherlands since Barings was taken over in May. They have now signed a truce which will last until the issue is decided in court starting on 30 October.

When the Dutch bank ING bought Barings it allowed for the eventual repayment of a $150m loan from the Dutch subsidiary Barings BV to Baring Securities (International).

Two sets of bondholders are seeking this money: holders of 1986 capital notes and holders of 1994 floating rate notes. The terms of the 1986 issue contain a special clause that if Barings BV is put into liquidation, the bondholders have no claim against it - only against the holding company Barings plc, which guaranteed the notes.

Barings BV was neither put into administration nor bought by ING - it was simply left alone.

If the Dutch arm is forced into liquidation, the 1986 holders, led by Bank of Egypt, are unlikely to get anything from the UK holding company.

The 1994 bond agreement contains no such special clause, and holders can therefore choose whether to claim against the Dutch subsidiary or the holding company. The 1994 holders have therefore tried a number of times to put Barings BV into bankruptcy in both the UK and the Netherlands, to keep all the money for themselves.

The 1986 bondholders issued a writ in March claiming that the special clause was not valid and claiming 50 cents in the dollar, or $75m.

So far the 1986 group has stymied the 1994 group's efforts. In a twist to the tale, Law Debenture Trust is the trustee to both the 1986 and 1994 issues, and has had to pass the 1986 holders on to its subsidiary, LDC, in an attempt to create a "Chinese Wall".

Two attempts have already been made to wind up Barings BV by two independent bondholders and by Law Debenture. The 1986 holders responded by appealing to the Dutch Central Bank, which on 3 May agreed to appoint an administrator to supervise Barings BV.

This appointment blocked all bankruptcy petitions against the subsidiary, and on 3 July all the warring factions signed a truce - a standstill agreement which will last until 30 October 1994, when the issue of the special clause will be decided at the High Court in London.

PROMOTED VIDEO
Arts and Entertainment
From Mean Girls to Mamet: Lindsay Lohan
theatre
Sport
Nathaniel Clyne (No 2) drives home his side's second goal past Arsenal’s David Ospina at the Emirates
footballArsenal 1 Southampton 2: Arsène Wenger pays the price for picking reserve side in Capital One Cup
News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
peopleFormer boxer 'watched over' crash victim until ambulance arrived
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
i100
Travel
travelGallery And yes, it is indoors
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Arts and Entertainment
The Tiger Who Came To Tea
booksJudith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed'
News
i100
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Syria air strikes: ‘Peace President’ Obama had to take stronger action against Isis after beheadings

Robert Fisk on Syria air strikes

‘Peace President’ Obama had to take stronger action against Isis after beheadings
Will Lindsay Lohan's West End debut be a turnaround moment for her career?

Lindsay Lohan's West End debut

Will this be a turnaround moment for her career?
'The Crocodile Under the Bed': Judith Kerr's follow-up to 'The Tiger Who Came to Tea'

The follow-up to 'The Tiger Who Came to Tea'

Judith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed' - which has taken 46 years to get into print
BBC Television Centre: A nostalgic wander through the sets, studios and ghosts of programmes past

BBC Television Centre

A nostalgic wander through the sets, studios and ghosts of programmes past
Lonesome George: Custody battle in Galapagos over tortoise remains

My George!

Custody battle in Galapagos over tortoise remains
10 best rucksacks for backpackers

Pack up your troubles: 10 best rucksacks for backpackers

Off on an intrepid trip? Experts from student trip specialists Real Gap and Quest Overseas recommend luggage for travellers on the move
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world