Harbinger Calls Northern Rock Valuation 'Unreasonable'

Jun 1 2011 | 8:15am ET

Harbinger Capital Partners has gone to court insisting that collapsed British bank Northern Rock's preferred shares are worth something.

Auditors appointed by the British government determined that the nationalized bank's shares were worthless. But Harbinger, which owns a "substantial" amount of those shares, calls that valuation "utterly unreasonable."

The New York-based hedge fund said a post-nationalization "fire sale" destroyed £4 billion in Northern Rock's value. Prior to that, the preferred shares were worth £400 million.

"That destroyed the value that had already been there," Harbinger lawyer Mark Phillips said. The valuation "is wrong on almost every single level," he added. The hedge fund said that Northern Rock should pay out £322.5 million in compensation to preferred shareholders.

Harbinger will certainly be hoping for a better result than that achieved by common shareholders, including RAM Capital and SRM Global, which lost a 2009 lawsuit to review the valuation of those shares.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…