HBOS not bust when Lloyds bought – QC
HBOSwa snot worth less at the time of Lloyds’ acqui siti on, and the purchase was not a “sales job” by the bank’s executives led by former boss Eric Daniels on the rest of the board, a court has heard.
Helen Davies QC said the recommendation to shareholders of the acquisition was a “unanimous decision” of the 15- strong Lloyds board, many of whom were “distinguished” and had held senior positions at FTSE 100 companies.
Davies told the High Court that the Lloyd sboar din a“careful and thorough process” was also entitled to consider the advice of a“veritable army of professional advisers”.
About 6,000 Lloyds share - holders have brought a legal action against five former Lloyd s executive sand the bank itself alleging they were misled as to HBOS’S true financial state when they voted for the acquisition in 2009.
On claim ants’ allegations th a tH B OS was“not worth a penny” at that time, Davies said: “That’s a proposition we simply do not accept.”
She said those allegations contained “myths and misconceptions”, and that they confused the liquidity ( ie, funding) of HBOS at that time with the value of the target’s underlying assets.
Among the executives named in the action are Daniels and ex- chairman Sir Victor Blank. Davies said much of the claim ants’ case was based “on hindsight”, and that Lloyds’ assessment of possible high impairments a tH B OS “didnot lead inexorablyto concluding that the deal made no sense and therefore should not have been recommended.”