Opal founder Wall adds Libor claim to £40m RBS lawsuit
THE founder and former owner of a failed Manchester student housing company Opal Property has launched a further claim against lender, Royal Bank of Scotland in a multi-million pound court action he is taking.
Stuart Wall, who is already claiming £40m in damages against RBS for having been allegedly mis-sold interest rate swap products, is now also claiming that the bank sold hedging products linked to Libor while trying to rig the interest-rate benchmark.
Mr Wall added the Libor allegations to his existing case, according to documents filed at the High Court in London in June and released this month, the Bloomberg news agency said.
Mr Wall said RBS should have told him Libor wasn’t being calculated honestly, and should have warned Opal about problems in the commercial mortgage-backed securities market that led to the collapse of a planned finance deal.
Opal was unable to pay its debts of more than £900m owed to 12 lenders including RBS and was placed into administration in March 2013. It is now in liquidation its assets having been sold.
RBS’s representatives didn’t “disclose their knowledge of misconduct on the part of RBS and other panel banks in relation to Libor setting and the weakness” of the commercial mortgage-backed securities market, Mr Wall said in court documents. Opal wouldn’t have signed the hedging contract if it had been aware of the true situation, the documents said.
Opal entered into an interest-rate swap with RBS in June 2007 ahead of a planned sale of commercial mortgage-backed securities as part of a refinancing called Project Starburst that never took place because the market deteriorated.
Mr Wall said he and other executives never understood the transactions and RBS was “unjustly enriched” because of payments made under the swap.
Interest-rate swaps were sold as a way to protect against rising rates. They turned out to be costly for thousands of bank customers when interest rates fell to record lows after the 2008 financial crisis.
The legal documents state: “RBS failed to deal with OPGL (Opal Property Group Ltd) fairly and with due regards to its interests, or to manage the conflicts it faced fairly, or to act with integrity.”
The case is Stuart Barrie Wall v. Royal Bank of Scotland Plc, High Court of Justice, Queen’s Bench Division. RBS, declined to comment when approached. Mr Wall’s lawyer, Andrew Wass of London firm Withers has also not commented on the matter.
