Leeds motor sales group seeks High Court ruling against PwC and Lloyds
Liquidators of a Leeds motor sales group will this week seek a High Court ruling against PwC and Lloyds, arguing their actions contributed to the business’s collapse.
The case is similar to allegations made against RBS’s GRG division, which has been the subject of the Tomlinson report and a number of legal actions. PwC and Lloyds both deny the claims and will be contesting the action.
Premier Motor Auctions, which was incorporated as Premier Motorauctions and Premier Motorauctions Leeds, appointed administrators in December 2008.
In 2015, former owner Keith Elliott set about launching a High Court action against the actions of the company’s bank, Lloyds, and the firm of advisors who became its administrators, PwC.
A hearing in the High Court is expected to take place tomorrow, with the case expected to be argued in full in April.
A 57-page document, seen by TheBusinessDesk.com and submitted by the liquidators, Freddy Khalastchi of Menzies to the court, sets out a series of claims centred around the allegation that the advisor from PwC conspired with colleagues and with Lloyds Bank to unnecessarily take a healthy company facing a short-term cashflow problem into administration.
Its case states that in August 2008, Elliott was introduced to a PwC partner as someone prepared to undertake the role of a non-executive director at the company. The papers state that was “at a time in their history when they were growing but facing short-term, reparable cashflow difficulties.”
It is claimed this was shortly after the firm had restructured certain banking arrangements on favourable terms with Lloyds’ local management team.
The papers state: “The introduction was brought about by means of a deliberate misrepresentation or negligent misstatement as to the intended role (of the PwC partner).”
It is alleged that they agreed to an “interim business review” by PwC for the purpose of enabling the conduct and value of an accelerated sale of the motor business with a view to Lloyds obtaining a stake in the business.
The paper also alleges that there was breach of fiduciary duty centred around the immediate increase in an overdraft loan facility of £2m.
PwC has instructed DLA Piper’s Leeds practice to defend the claim and Lloyds Bank has appointed CMS Cameron McKenna Nabarro Olswang, to defend the claim.
A Lloyds spokesman said: “Mr Elliott’s and the companies’ allegations have been reviewed extensively over a number of years at the most senior levels within the bank. Mr Elliott has involved regulators, law enforcement and media; and has asked questions at Annual General Meetings and made regular complaints to senior Group colleagues. As a result, the matter has been rigorously examined internally, as well as by a number of outside parties. No evidence of any wrong doing has been identified by any party to date. As the matter is subject to ongoing court proceedings we are unable to comment further at this stage.”
