Fresh twist in Cattles saga

BONDHOLDERS in troubled sub-prime lender Cattles are planning to apply to the Supreme Court in a challenge to a decision that could leave them heavily out of pocket in a restructuring of the company’s debts, according to reports.

The Court of Appeal yesteday upheld an earlier court decision that ensures a guarantee to Cattles’ bank creditors that will see them paid in full before the bondholders.

An anonymous Cattles bondholder – referred to as party A – has been fighting for holders of £750m of bonds issued by Cattles.

Party A is now set to challenge the decision in the highest court, the Financial Times has reported.

Majority state-owned bank Royal Bank of Scotland had argued that the bank should have priority over bondholders if Cattles went into administration.

The bank is one of Cattles’ biggest creditors.

Yesterday, party A was refused permission by the Court of Appeal to go to the Supreme Court but it now has 28 days to go direct to the Supreme Court itself asking for permission to appeal.

Earlier this week, Cattles reported a pre-tax loss of £745.2m in its delayed results for 2008.

Cattles has axed a number of staff after a gross underestimation of its bad debt provisions came to light.

The financial regulator the FSA is investigating whether Cattles’ directors made accurate announcements about the lender’s finances.