The race is on for the “diehard” investors suing the Royal Bank of Scotland (RBS) to raise funds to cover their legal costs, as the court is due to reconvene on Wednesday.
Thousands of shareholders have mounted a legal challenge against the bank, saying that they were misled over the extent of the financial troubles at the bank during its rights issue and shortly before its bailout in 2008.
Sources told City A.M. last week that around 63 per cent of the 9,000 investors are not ready to settle, and had raised around half of the estimated £7m needed to pay legal costs and keep their claim alive.
This had increased to £4m raised by the weekend, according to The Sunday Times, with litigation funders and high-net-worth individuals named as potential sources of capital.
If the total has not been reached by Wednesday, when the court reconvenes, the High Court judge may still grant a short adjournment to give the group extra time.
RBS has denied the allegations levelled against it, and several major shareholders – including Trevor Hemmings, who was funding a large part of the action – have already chosen to settle.
The bank was offering a settlement of 82p per share, which would have cost the majority taxpayer-owned institution around £200m.
The shareholder action group wrote to the investors it represents last week to tell them it would accept the offer.
However, it needed acceptance from 70 per cent of claimants by value of the £520m High Court claim for the decision to be binding.
If the determined investors do manage to raise adequate funds to pursue the court case, disgraced former RBS boss Fred Goodwin could be forced to spend two days in the witness box.