By Ian Fraser
Published: Sunday Herald
Date: 12 October 2014
Several hundred businesses that claim to have suffered at the hands of Royal Bank of Scotland’s “turnaround” division have appointed US law firm Quinn Emanuel Urquhart & Sullivan to represent them in a planned case against the bank.
The RBS GRG Business Action Group members – who include business owners, managers and directors, as well as shareholders and bondholders – claim to have been let down by the bank’s global restructuring group (GRG). A spokesperson for the action group said: “We are committed to taking action before Christmas, and Quinn Emanuel will now start processing the first 200 viable claims. We anticipate having at least 600 registered.”
Allegations – which were also highlighted by former government adviser Lawrence Tomlinson last November – include that RBS “manufactured” defaults via misleading valuations on firms’ commercial properties, and that GRG bankrupted viable firms by piling on excessive fees and charges, enabling its West Register property division to scoop up properties at knockdown prices.
RBS has denied the allegations. It commissioned law firm Clifford Chance to conduct a review, which rejected Tomlinson’s “central allegation”.
Last month, RBS GRG Business Action Group appointed London-based Clyde & Co as its lawyers, but on 24 September the firm stepped down after some of its insurance clients said it was “conflicted”, as they provided cover to RBS.
America’s leading business litigation law firm, Quinn Emanuel has had a London arm since 2008. It is already representing Standard Life, Prudential, Legal & General, Aviva and others in a separate case against RBS related to the bank’s £12 billion rights issue in 2008.
RBS is shutting down GRG, claiming that improving economic conditions have reduced the need for restructuring. A bank spokesman declined to comment on the planned legal action.
This article was published in the Sunday Herald on 12th October 2014.