Finance: Former RBS CEO Fred Goodwin looks set to avoid a big day in court
Investors are suing the bank and former RBS executives after they invested in the bank during its £12 billion rights issue in 2008 and lost most of their money.
LONDON – Fred Goodwin, the former CEO of Royal Bank of Scotland, will likely avoid cross-examination in court after a group representing investors and former employees agreed to settle its dispute with the bank.
"As you may be aware from recent press reports, the Bank has made an increased and improved settlement offer which the Board of the Action Group has decided to accept," the RBS Shareholder Action Group said in a statement on its website.
"We have sent a written update to the retail membership setting out the reasons for that decision," the group said.
The dispute, which would have seen former CEO Fred Goodwin make his first public appearance in eight years as a witness on June 8 and 9, has been active for years.
The group of investors and former employees, which has thousands of members, started its lawsuit in 2013 against RBS and former RBS executives Fred Goodwin, Tom McKillop, Johnny Cameron, and Guy Whittaker. It accused RBS and the former executives of "misrepresenting the underlying strength of the bank and omitting critical information from the 2008 Rights Issue prospectus."
The bank, which is still majority state-owned, doubled a settlement offer earlier this month, proposing an 82 pence-per-share settlement to the claimants, or around £200 million in total. This is more than double a previous offer of 40p-per-share.
The case was due to be heard in court on May 22, and last 14 weeks, but was adjourned three times until June 7, to give more time for last-ditch settlement talks.
The judge presiding over the case, Mr Justice Hildyard, said it was "an exceptional case with exceptional logistical problems," according to a report by BBC News.
"We must have certainty one way or the other. The court must know whether the matter is to proceed or not."