Compensation agreed for Cattles shareholders
MORE than £16m in compensation claims have been secured for a group of 60 former Cattles shareholders.
Sub-prime lender Cattles’ subsidiary company Welcome Financial Services has paid the compensation.
The landmark settlement is believed to be the first time a subsidiary business has paid compensation to shareholders in the collapsed parent company.
The shareholders, including private individuals and a number of charities, lost millions when the Cattles plc shares were suspended in April 2009.
Cattle was a FTSE 250 company specialising in sub-prime lending but got into difficulties when accounting irregularities were uncovered.
Shareholders subsequently received 1p for each share in Cattles that were originally issued for £1.28. But those who refused to accept the offer continued their fight for compensation.
And the agreement will see them paid 27p in the pound.
Cattles left the stockmarket last year after its shares were bought by Bovess.
The shareholders fought for three years to secure redress and a deal has been agreed with the scheme supervisors of Welcome Financial Services, just ahead of appeal papers for the 60 claims, prepared by a team of lawyers at Leeds-based law firm Clarion, being presented to the Companies Court in London.
Shareholder Barry Dearing, who led the shareholders in their actions, called in Clarion when it became apparent that it was going to be necessary to take court action to preserve the claims.
Clarion partners Simon Young and Paul Burkinshaw assembled a five-strong team of Leeds lawyers to prepare the court papers for the claims in just three days.
An agreement was reached with the scheme administrators on terms acceptable to the shareholders preventing the need for further court action.
Mr Dearing said: “The decisive and swift action ensured that a prompt settlement could be reached with the scheme administrators on behalf of the former shareholders.”
Simon Young of Clarion said: “As far as we are aware, this is the first time a subsidiary of a quoted plc has agreed to pay compensation for losses sustained by shareholders in a parent company.
“The settlement is welcome news for the shareholders after a long battle and should reduce the losses sustained by them to a slightly more bearable level.”
