Who's suing who

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The Independent Online
THE COLLAPSE of Robert Feld's Resort Hotels group four years ago and his subsequent jailing for fraud continues to produce great waves of litigation. There are at least nine writs in circulation so far from various parties, seeking compensation over the pounds 20m fraud. The strangest writs must surely be those from Roberta Feld, Mr Feld's sister, who is suing him for the money she lost in the Resort Hotel failure.

Even though Mr Feld is currently serving a six-year sentence at Coldingley Open Prison (recently reduced from eight years), he is also being sued by his sister together with his wife Tara, who is acting on behalf of his late mother.

Both writs have been issued via Harkavys, the solicitors who previously represented Mr Feld during his criminal trial last year. Both writs are against Mr Feld , three other Resort directors, and the company's auditors Coopers & Lybrand. Mr Feld's mother's estate lost pounds 200,000 when Resort went bust.

Meanwhile last week solicitors Edwin Coe issued two writs against Mr Feld and his professional advisers on behalf of shareholders who also lost out. Both writs concern a prospectus for a rights issue published on 30 April 1992 by Mr Feld, who forged the figures to make the business look more successful than it was. The rights issue aimed to raise pounds 20.6m.

In one writ 252 individual shareholders are demanding damages from the remains of Resort Hotels, Mr Feld and 14 other defendants, including Coopers the auditors, Barclays De Zoete Wedd, the brokers to the issue, and a raft of nominees companies such as Barclay Share Nominees Limited.

This writ has been prompted by the Resort Hotels Shareholders Action Group, founded after a company meeting in 1993 which vividly revealed the parlous state of the company's finances. The group represents over 500 shareholders and is chaired by John Bancroft, who is named as one of the plaintiffs of last week's writ.

Other plaintiffs include The Leukaemia Research Fund, which invested pounds 31,500 in 86,000 Resort shares between May and October 1992.

In a second writ issued by Edwin Coe last week Invesco Enterprise Trust is demanding damages over the forged prospectus from nine defendants, again including Mr Feld, Coopers and Barclays de Zoete Wedd.

Shareholders have also issued four other writs via solicitors Leon Kaye Collins & Gittens, while debenture holders have issued one via Norton Rose, in an attempt to win compensation in the Resort affair. All the writs share Coopers as one of the various defendants.

Regarding the two writs issued by Edwin Coe, a spokeswoman for Coopers said: "They have not been served, so we cannot comment."

Legal observers expect Resort to produce plenty more litigation before the dust finally settles.

THE Financial Services Authority (FSA) is suing the Co-operative Insurance Society in a wrangle over the regulator's former head office in the City, which it leases from the Co-op.

The FSA, the new super-regulator, has already moved out of Gavrelle House, Bunhill Row, and further east in London to Canary Wharf in Docklands.

A new tenant for Bunhill Row, the Post Office, is ready to move in. The Co-op and the FSA are now in a commercial dispute over property rights, however, and last week the Post Office requested that the FSA launch a writ against the Co-op.

The FSA has now issued an originating summons seeking a declaration by the court that it has a tenant's right to assign the lease of the Bunhill office without the landlord's (Co-op's) consent.

The regulator wants to assign the Bunhill lease to the Post Office. The FSA's writ, issued through solicitors Allen & Overy last week, concludes: "In the event that the Plaintiff has suffered any loss and damage by reason of the Defendant's conduct damages to be assessed."

THE FSA issued an entirely separate writ last week, through a different law firm, Clifford Chance, and this time purely in its role as a regulator.

On 1 May it started proceedings against a South African-owned investment company, Paragon Securities, and its three directors - Simon James Parry, Dean Dempsey and Justin Stanley Russell.

The writ alleged breaches of section 47 and 57 of the Financial Services Act 1986, which cover misleading statements and advertising investment services in the UK without authorisation.

The FSA launched its action after Paragon had started to contact potential investors in the UK.

Yesterday, at a hearing before Mr Justice Lightman, Paragon Securities and the directors voluntarily gave undertakings to the Court not in the future to breach sections 47 and 57 of the Act.

Paragon has also indicated to the FSA that it intends to ensure that its future dealings with clients meet the standards required.

Justin Russell has resigned as a director and employee of Paragon Securities with effect from 7 May 1998.

Paragon Securities has agreed to make a contribution to the FSA's costs in the proceedings, and those proceedings have now been stayed.