All that should have changed with the decision to launch what amounts to a distress rights issue. Shareholders are entitled to think that the rights circular is a 'bare all' document, that for the first time in a long time they have been put fully in the picture. A pretty unedifying one it is too except for one thing that should have brought at least some relief. There are, the document says, 'no legal or arbitration proceedings pending or threatened against the company'. But hold on a moment. I thought there were.
It is well known that a group of former Davy shareholders are planning to sue Trafalgar for the pounds 54m they believe they are still owed. Trafalgar also knows that the Davy shareholders have been advised by leading counsel that they have a good case. If this isn't threatened litigation I don't know what is. Furthermore, Trafalgar plainly thinks it's a threat too. A note tacked on to the bottom of the underwriting agreement, available for inspection at the offices of Ashurst Morris Crisp in the City, reveals that, in the event of Trafalgar being sued by former Davy shareholders, sub-underwriters would still have to stand by their obligations. Oh dear.Reuse content