A High Court judge last week dismissed claims brought against the insurer's venture capital arm by business consultant George Hosking over the pounds 265m buyout of own-label detergents maker McBride in 1993.
Mr Hosking was claiming over pounds 4m after being forced out of the management buy-in (MBI) team for McBride because, he alleged, he had refused to massage profit forecasts upwards to suit City backers.
In a judgment welcomed by financiers, however, Mr Justice Harman rejected the suit, finding that no binding promises had been made while LGV sought City backing for the deal. Nor did the idea itself entitle him to any reward, the judge found.
"For the venture capital industry following the case, it will be an immense relief that the status quo has been preserved," said LGV's managing director, Charles Peal.
"When negotiating 'subject to contract', no binding commitments are made at all."
Mr Hosking, a former Unilever executive, now runs his own industry consultancy, Cameron Consultants. He took the idea to LGV in November 1992 when BP was dismantling its huge nutrition arm, which included the McBride super-market own-label soap powders and personal care business.
After a series of disputes with LGV, however, and chief executive Michael Handley - whom he brought in from Ranks Hovis McDougall - he was replaced as chairman designate by Lord Sheppard, former head of Grand Metropolitan.
Mr Handley went on to gain pounds 4m in shares and options, and Lord Sheppard pounds 1.7m, when McBride was floated for pounds 329m in July 1995. LGV also made tens of millions through the sale of a 15 per cent stake.
Just six months later, however, McBride shares collapsed after a profits warning - at 1321/2p today investors are still nursing huge losses on its 188p flotation price.
Mr Hosking alleged he was forced out after he refused to endorse a profits estimate of pounds 50m for 1995 to entice City backers regarding the buy-in.
In the event, McBride forecast operating profits of just pounds 38.7m at flotation, which collapsed to pounds 27.9m for 1996 because of production problems. Controversy followed over when the management actually knew before giving the warning.
In his judgment, however, Justice Harman restricted himself to the narrow legal contract claims of the case.
"There is no property in an idea, perhaps especially one that has failed, and in my judgement Mr Hosking has not proved any of the claims based on rights known to the law," the judge concluded.