In our last blog we highlighted the case of businessman Michael Hockin’s 15-month battle to be allowed to sue RBS over a mis-sold Interest Rate Swap (IRS) which added over £600K to his company’s annual repayment bill to the bank.
The High Court ruled in his favour even though his company had been put into administration and, as mentioned, the administrators had declined to pursue the bank for the benefit of creditors.
We’ve found an interesting little note on the Financial Conduct Authority’s (FCA)website regarding reviews of a bank’s mis-selling of an IRS, which clearly states that businesses in administration are (our italics) eligible to participate in the review: http://tinyurl.com/pgqsr9p
“…when banks invite businesses in administration to submit any relevant information…..we would generally expect administrators to offer the former directors or shareholders the opportunity to put forward their perspective.
“However, it will be the administrators and not the former directors or shareholders who will engage with the banks during the review.” (our italics again)
We have previously questioned the conflict of interests between panel firms advising directors and their relationship with banks. Is there another potential conflict between panel firms representing banks and their duty to unsecured creditors? These issues were not included in last month’s review by the Insolvency Service of the regulatory regime and fee structure. A missed opportunity.