Thursday 31 October 2019 7:27 pm

Judgment imminent in Lloyds' shareholders £600m financial crisis-era group action

The long-awaited judgment in a financial crisis-era shareholder action against Lloyds Banking Group and five former directors of Lloyds TSB is expected imminently, according to people close to the case.

The £600m claim focused on Lloyds TSB’s acquisition of HBOS in autumn 2008 at the height of the financial crisis.

The claimant group of 300 institutions and nearly 6,000 individual shareholders alleged that when they voted to approve the deal they lacked key information about HBOS’ financial health.

Read more: Lloyds Banking Group profit slumps 97 per cent after £1.8bn PPI hit


They said that the directors of Lloyds did not reveal that Lloyds TSB had provided a £10bn loan facility to HBOS to help it until the acquisition went through, and that the Bank of England had provided emergency assistance to HBOS of up to £25bn.

The claimants alleged they suffered losses as a result of the deal because of the Lloyds TSB directors’ breach of duty in recommending the acquisition to shareholders without providing them adequate information about the deal.

Read more: UK banking sector coughs up £40bn as tax burden mounts

The case went to trial in the High Court in late 2017 and lasted for five months.

The claimants were represented by law firm Harcus Sinclair and backed by litigation funder Therium and Lloyds was represented by Herbert Smith Freehills.

A spokesperson for Lloyds said: “The group made its case in court that the claims were without merit. We await judgment.”

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