Shareholders lose multimillion-pound legal battle against Lloyds
Lloyds shareholders have lost a multimillion-pound High Court action over the acquisition of HBOS.
A judge sitting in London on Friday dismissed an action by a group of 5,803 former Lloyds TSB shareholders who claimed they were “mugged” when the bank recommended the January 2009 deal without disclosing HBOS’s true financial state.
Sir Alastair Norris announced his decision following a 2017 trial of the case brought by the shareholders against Lloyds Banking Group and former executives over alleged losses running into millions of pounds.
Lloyds “robustly” contested the civil legal action, saying it did not consider there was “any merit” in the claims.
The acquisition left Lloyds saddled with toxic assets and it was later forced to take a government bailout worth £20.3 billion, which has been blamed in part on the takeover.
During the hearing of the dispute, the judge heard from a lawyer for the shareholders that directors recommended the “disastrous” acquisition when, based on information they had, no reasonable director would have done so.
But it was argued on behalf of Lloyds that the allegations of wrongdoing were “entirely devoid of merit”, and the unprecedented claim was “fundamentally flawed at every level”.