Lloyds Banking Group PLC (UK)
Status: Ongoing Case
Labaton Sucharow represents clients as liaison counsel in an action against Lloyds Banking Group PLC (Lloyds), a British banking and financial services company, and its former board of directors alleging breaches of duties to shareholders in relation to the company’s acquisition of British baking firm HBOS plc in January 2009.
The action alleges that Lloyds and its former board of directors failed to disclose and took steps to conceal the financial health of HBOS, which was acquired by the company in January 2009. Unbeknownst 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 dramatically overvalued 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.