The trial billed as the most expensive in British legal history was halted after just one week yesterday.
Liquidators to Barings Bank settled a £1bn claim against PricewaterhouseCoopers, one of the company's former auditors. The agreement is the second attempt at an out-of-court settlement, and leaves PwC co-operating with the liquidators in continuing legal action against its co-defendant, the auditor Deloitte & Touche.
KPMG, the liquidators, announced the settlement in the High Court yesterday, without giving details. PwC is thought to be paying no more than £75m in the deal, with both parties paying their own costs. The trial was expected to cost the various parties involved a total of £100m.
An earlier settlement, brokered by Ernst & Young, collapsed in July amid disputes with and between creditors. E&Y, which was subsequently dropped as liquidator and replaced by KPMG, and Alan Bloom, the E&Y partner behind the failed deal, now leads the administrators put in control of Railtrack at the weekend.
The terms of the latest settlement run to more than 200 pages and will be finalised after KPMG reconstitutes its case against Deloittes, which in its defence plans to draw PwC back into court as a third party. KPMG may waive rights to any contributory damages awarded against PwC if Deloittes loses the case.
The settlement leaves Barings' creditors flush with funds to pursue Deloittes. It was unclear yesterday whether they would seek a settlement with the accountancy firm, which has indicated it is up for a fight in open court. "So many announced settlements over the past four months have proved false, or at least premature," said Rick Murray, legal adviser to Deloittes. "We await confirmation."
PwC and KPMG declined to comment.Reuse content