Archive for January, 2009

Court in session: In re Northern Rock Plc

Wednesday, January 14th, 2009

The trial pitting former shareholders of Northern Rock Plc against the UK Government has kicked off yesterday. (previous post) The Government nationalised the bank early last year and the issue of this judicial review is the level of compensation its shareholders are due under the Banking (Special Provisions) Act 2008. A selection of the many press articles on the case: Legal Week, The Lawyer, FT and The Times.

Among other players are Lord David Pannick QC of Blackstone Chambers (instructed by White & Case LLP) for SRM Capital, one of the bank’s two biggest shareholders at the time (also see The Times); George Bompass QC of 4 Stone Buildings (instructed by Edwin Coe LLP) for the 150,000 individual shareholders that account for 25% ownership; and Lord Anthony Grabiner QC of One Essex Court (instructed by Slaughter and May) for the Commissioners Of Her Majesty’s Treasury.

The trial is scheduled for three-and-a-half days, to end Friday, at the Administrative Court (situated at the Royal Courts of Justice). Catch it while you can.

WpHG basis for HypoRE damages claims

Wednesday, January 14th, 2009

On 2 October 2007, Hypo Real Estate Holding AG’s (FRA: HRX) shares were trading well above €40 a share. That day, HRX completed the acquisition of Deutsche Pfandbriefbank AG (DEPFA) for more than €5 billion. (press release) At the close of trading yesterday, the shares were at just above €2, the combined group worth just over €400 million.

The board of directors of HRX allegedly withheld price-sensitive information in relation to this acquisition and since then in relation to the combined group’s state of affairs. It wasn’t until 29 September 2008, when HRX announced a ‘major new funding facility’ (press release), that the real, dire financial situation the group was in became clear. In the period between those dates, it had among other things released an operating performance update (7 November), its preliminary 2007 figures (15 January) and several interim reports (31 March, 30 June). The resulting decline of its share price damaged investors, according to the law firm Winheller Rechtsanwälte in this press release (in German, in English; details, in German).

Winheller therefore urges shareholders to claim damages under sections 37b and 37c of the Gesetz über den Wertpapierhandel (in German; Securities Trading Act). Those two sections provide the legal basis for claims against issuers of financial instruments that trade on German exchanges, due to omission of price-sensitive information or publication of untrue information. The statute of limitations for such claims is no longer than three years from the omission or publication, respectively, though it could be as short a period as one year from when the ommission or untruth was known to the third party (WpHG §37b(4), §37c(4)). Hence Winheller’s advice to file a claim no later than 15 January 2009 (this Thursday), one year after publication of the 2007 figures, though arguably the omissions and/or publications continued and were not known until the announcement of 29 September 2008 and therefore a claim by 29 September this year could still be within the limitations period.

Further to these same allegations, last month the district attorney’s office in Munich (with the involvement of Germany’s financial services regulator, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) searched Hypo Real Estate’s offices and the homes of former executives and a former chairman (Bloomberg).

European Securities Litigation, the Conference

Thursday, January 8th, 2009

The alternative name for this post could’ve been “Does exactly what it says on the tin”. (hint) If you’re not familiar with that phrase, translate that to the more straightforward “What you see is what you get”. (explained or watch) For the three events listed below are literally named after their respective programme contents.

Securities Docket hosted its first webcast Tuesday, entitled 2008 Year in Review - Securities Litigation and Enforcement. (details; via BrightTALK, registration required) It’s free to play from the archive.

Barroway Topaz Kessler Meltzer & Check LLP’s fourth annual Rights & Responsibilities of Institutional Investors conference is forthcoming. It will be held on 12 March in Amsterdam at the Renaissance Hotel. (details) This year’s keynote speaker is former US Secretary of State Madeleine K. Albright.

The Ronseal prize however goes to the Euromoney Institutional Investor Plc’s inaugural European Securities Litigation Conference. (Main sponsor: Bernstein Litowitz Berger & Grossmann LLP) It takes place on 30 and 31 March in London at the Radisson Edwardian Marlborough. (details, programme)

This conference boasts a number of familiar speakers as well as interesting new ones and covers a wide spectrum of topics, all related to European securities litigation. An outlook on 2009 and the coming ‘wave of actions’, an update on litigation funding, perspectives from regulators and in-house counsel, a discussion of hedge funds’ roles in collective actions and dealing with the difficulties of (lack of) discovery are all in there, as is the big one: ‘how will trustee obligations propel pension funds into securities litigation cases?’

Change of venue: European Securities Litigation Conference has changed its venue to the Radisson Edwardian Mayfair.