Tony Woodings, the liquidator for Bond's Bell Group, said yesterday he had taken out the largest ever legal costs insurance to proceed with the case, which has been stalled in the Australian courts for four years. "The decision by the insurance underwriters to accept the risk demonstrates the strength of the action being taken," he said.
The case, brought on behalf of other Bell Group creditors including the Australian Tax Office, is likely to resume in Australia early next year. Bernard Clarke & Co, which negotiated the liquidator's pounds 15m cover from a consortium of insurers, said that new rules allowing premiums to be recovered by the winning side meant cash-strapped plaintiffs would increasingly take out insurance rather than be deterred from pursuing their claim.
Lloyds TSB said: "Proceedings were issued against the banks in 1995 and the banks are defending them rigorously." Lloyds Bank headed a consortium of 14 European institutions which, together with six Australian lenders, are alleged to have obtained securities over most of Bell Group's assets when they knew or should have known it was nearly insolvent. Mr Woodings says that they benefited at the expense of other creditors and should pay back the money.
Bell Group, which went under in 1991, was the flagship company of the late Robert Holmes a Court before it was taken over by Bond Group in 1988. Bond is serving a seven-year prison sentence for fraud, but is appealing against his conviction.
The other European banks named in the case are Credit Lyonnais, Dresdner, Kredietbank, DG Bank, Gulf Bank, Skopbank, Gentra, Bank Indosuez, Banco Espirito Santo e Commercial de Lisboa, Bank fur Gemeinwirtschaft, Credit Agricole and Creditanstalt.Reuse content