Montagu to pay pounds 170m in B&C settlement


Financial Correspondent

Samuel Montagu, the merchant bank owned by HSBC, is to pay pounds 160m plus pounds 10m costs in an out-of-court settlement to the administrators of British & Commonwealth, the crashed financial conglomerate built up by John Gunn in the 1980s.

This represents the UK's biggest single payment on record to creditors of a bust company.

Sir William Purves, chairman of HSBC, intervened personally to engineer a settlement of the complex "Quadrex" litigation which has dragged on for seven years.

The deal clears the way for a payout by the administrators of a further pounds 227m, representing 15p in the pound to creditors of B&C Holdings and 5p in the pound to those of B&C Group Finance.

The administrators, Stephen Adamson of Ernst & Young and Peter Phillips of Buchler Phillips, are in the process of distributing a total of pounds 1.25bn.

The biggest creditor is Law Debenture Corporation, which is trustee to a number of pension fund investments. Others owed large sums include Barclays, Midland, Royal Bank of Scotland, Credit Lyonnais and Chase Manhattan.

The case concerned the aborted sale of B&C's money-broking division to Quadrex in 1987.

Mr Gunn, now no longer connected with B&C, agreed to sell the money-broking side to Qaudrex, then run by American entrepreneur Gary Klesch. Following the collapse of stockmarkets in October 1987 Quadrex pulled out of the deal, and B&C then sued the company and the adviser on the deal, Samuel Montagu. B&C claimed that the merchant bank had underwritten the deal, while the bank denied this.

B&C then lost pounds 500m over the disastrous acquisition of Atlantic Computers - still the subject of litigation. B&C went into administration in 1990 with debts of pounds 1bn. Mr Phillips was appointed co-administrator and took over the legal case against Hill Samuel. Quadrex had since collapsed, leaving nothing to sue.

Yesterday's settlement was welcomed by Mr Phillips as "brilliant news" but leaves a number of remaining problems. Mr Gunn is still facing disqualification proceedings as a director by the Department of Trade and Industry. And the administrators are fighting a pounds 150m legal claim by the Inland Revenue concerning the sale of Telerate by B&C in 1985.

The administrators are also suing BZW, the investment bank owned by Barclays, and Spicer & Oppenheim, an accountancy firm now part of Touche Ross, for well over pounds 600m.

Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
peopleAt least it's for a worthwhile cause
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

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...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

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
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments