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

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...