British 'pensioners and orphans' to challenge Bank of Ireland in court

British pensioners are taking legal action against the Bank of Ireland at the High Court this week as anger and resentment grows over attempts to plunder their savings.

The US-based law firm Brown Rudnick will represent around 2,000 British pensioners and investors, who face losing between 80 per cent and all but the very tiniest of fractions of their investments in bonds issued by the old Bristol & West Building Society. The Bank of Ireland took over Bristol & West in 1997 and it has been one of the major strugglers during the country's acute financial crisis.

A 2.6bn euro (£2.33bn) liability management exercise (LME) – essentially a financial restructuring – was demanded by the Irish government, which has a 36 per cent stake in the bank. Part of the LME involves owners of the Bristol & West permanent interest bearing shares, or Pibs, worth £75m. These were typically used to supplement pensions, as they offered generous annual payouts of 13.375 per cent of whatever had been invested.

However, under the terms of the offer, investors have been offered just 20p in the pound of whatever savings they ploughed into the bonds, barely covering even one year's payout. If a Pibs-holder voted "no" and the LME is voted through, as is expected, they will receive just one penny for every £1,000 of savings that is tied up in the bonds.

Pibs-holders argue that this potentially punishes the "no" minority and that the correct legal jurisdiction to decide the legality of the move is England rather than Ireland, which is why they are taking the bank to the High Court.

Waseem Shakoor, who has a significant Pibs holding and is one of the leaders of the action, said: "This makes people who vote 'yes' oppress the minority and pretty much punish those who say 'no'. I would urge people to reach out to the lawyers."

He also warned that such a coercive scheme defies standard practice among Western economies. He argued: "I'm more likely to lend money to [The X-Factor act] Jedward than I am to lend to Ireland. People will vote with their feet and Ireland will become a pariah state in the European Union."

Mr Shakoor is one of only a handful of Pibs-owners who holds enough to benefit from the offer of a debt-for-equity swap, which would value their holdings at 40 per cent of their value. The overwhelming majority do not have significant enough money to even get this amount.

To make matters worse, many of the pensioners and any family that have inherited the bonds, have only until 22 June to accept. The 20 per cent offer decreases if the initial deadline is missed.

Many of the pensioners are unlikely to have a broker to help them and might not even know where the original certificates are located, so there are fears that the elderly and infirm could miss the deadline.

Liz Cameron discovered on Friday that her £3,000 of Pibs, bequeathed to her by her late parents, was under threat. She said that she relied on the £400 annual payment to pay her heating bills, and are even more vital now as she has recently been made redundant.

"My parents left us these to help us through," she fumed. "They would be absolutely devastated to find their legacy has been stolen by the Irish."

Louise Verrill, a partner at Brown Rudnick's London office, said: "The firm recognises the special circumstances of the widows, orphans and pensioners which relate to this coercive scheme, which is oppressive."

John Hemming, the Liberal Democrat MP who used parliamentary privilege to reveal that Ryan Giggs was the footballer behind the recent superinjunction, is a leading Pibs-holder and part of the campaign. The group intends to write to the Irish government to condemn its "lack of common decency and fair play".

However, the Prime Minister, Enda Kenny, was elected earlier this year on a platform to make sure difficult economic decisions were taken in order to end the country's financial crisis, which saw Ireland bailed out by the EU and the International Monetary Fund.

A spokesman for the Bank of Ireland said: "In the context of the €2.6bn liability management exercise, the treatment of the Bank of Ireland 13.375 per cent Perpetual Undated Bond is consistent with that of other subordinated debt instruments:

"A) an offer is made to exchange into equity at 40 per cent plus accrued interest, while an offer is made to exchange into cash at 20 per cent excluding accrued interest.

"B) while – for European Prospectus Directive reasons – the equity exchange at 40 per cent is not open to bond investors with holdings converting to less than ¤50,000, should they choose to do so, such investors are free to sell those bonds to larger investors who can participate in the equity exchange.

"C) all bonds under the offer are covered by English law which is standard for most capital bonds."

The campaigners have launched a website to gather support for their cause at

Case Study

Albert Kempster, Glasgow

Mr Kempster cobbled together £24,000 towards the end of what he describes as "an up-and-down career", which included spells in teaching and farming.

He invested the money in the Bristol & West Pibs. It seemed a wise move: his £230-a-month pension would be bolstered by £1,800 of interest payouts a year. He describes the Bank of Ireland's proposal as "an absolute scandal" and wants to make a stand by voting against the deal, even if that risks losing almost every penny.

Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
ebooksAn unforgettable anthology of contemporary reportage
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

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