A High Court judge in London on Wednesday called off the trial due to begin in the long-running investor lawsuit against Royal Bank of Scotland over its 2008 rights issue that would have involved potentially embarrassing testimony from the bank’s disgraced former CEO Fred Goodwin, Reuters reported.
However, Judge Robert Hildyard said a minority of rebel shareholders who have not yet accepted an out-of-court settlement could apply for the trial to resume if they could prove by the end of July they had sufficient funding.
“In a difficult and novel situation, the process of bringing an end is not as easy as might be thought,” Hildyard told the court.
Amid laughter, he added: “It is the mark of a settlement that neither side should feel it (is) correct.”
The shareholders allege that RBS and its former leading executives misled them during a £12 billion share sale launched just before RBS’s near collapse and record £45.8 billion state bailout in 2008.
They lost up to 80% of their investments.
RBS has offered the RBoS Shareholder Action Group 82p per share, or around £200 million, to drop the case.
A lawyer for the group told the court earlier that 87% of the group had settled or intended to agree to the deal.
The bank said its offer remained open for a short period of time to the 13% of shareholders who had yet to formally accept it and said none of the outstanding claimants had indicated any intention to continue the claim.
The Press Association reported that Hildyard said in order for a trial to be held in the future “the court would require to be persuaded that further deployment of very considerable resources was justified.”
He urged that if there were to be any application to restore the trial, it should be done “the sooner the better so that the court may determine what it can do to assist.”
The judge indicated that any application to restore the proceedings had to be made by July 28.
RBS said in a statement: “87% of the remaining claimants by value have accepted the settlement offer and the trial has now been vacated.
“This includes the Action Group, which represents the individual retail claimants. The offer remains open for acceptance for a short period to the further 13%.
“It was made clear today in court that this delay is the result of procedural issues. None of the outstanding claimants have indicated any intention to continue the claim. ”
A spokesman for the RBoS Shareholder Action Group said: “This settlement with RBS comes after many years of campaigning for compensation on behalf of those who lost out in 2008.
“In that time, we have been forced to endure many struggles, including having to fund and run an entire case when the other claimants settled early.
“Our decision and resolve to press on has been vindicated by this settlement, which is twice that accepted by others who had much greater resources than us.”