Lloyds Banking Group PLC (UK)

Updated: January 09, 2017
Status: Ongoing Case

Labaton Sucharow represents clients as liaison counsel in a proposed action against Lloyds Banking Group PLC (Lloyds), a British banking and financial services company, and its former board of directors for breaching their duties to shareholders in relation to the company's acquisition of HBOS in January 2009.

The action alleges that Lloyd's and its former board of directors failed to disclose and took steps to conceal the financial health of British banking firm, HBOS, which was acquired by the company in January 2009. Unknown to shareholders, HBOS was on the verge of financial collapse at the time of the acquisition. The action alleges that in addition to a secret £10 billion loan from Lloyds in September 2008, HBOS was relying on covert financial support in the form of emergency liquidity assistance from the Bank of England and financial support from the Federal Reserve Bank of the United States. Furthermore, the action contends that Lloyds, which was well capitalized at that time, unnecessarily agreed to take part in a UK government-supported recapitalization scheme for the actual purpose of replacing known HBOS losses. By failing to disclose this information, it is alleged that Lloyds shareholders were induced to approve the acquisition of HBOS, which was drastically over-valued at approximately £5.9 billion. 

The action was filed in August 2014. The parties are engaged in discovery, and expert materials are due to be filed by mid-2017.