Bloxham liquidator allowed to act over UK proceedings
THE HIGH Court has granted permission to the provisional liquidator of Bloxham stockbrokers to instruct lawyers in proceedings involving the company due to be heard by the English courts later this month.
Ms Justice Mary Laffoy yesterday made an order allowing Kieran Wallace, who was appointed provisional liquidator to Bloxham last week, to instruct lawyers on litigation against US bank Morgan Stanley over bonds that collapsed in value.
One of the reasons Mr Wallace’s appointment was sought was to instruct solicitors for that litigation. In an affidavit to the court yesterday, Mr Wallace said Morgan Stanley is being sued for €20.5 million by investors over the loss of almost all of their investment in the so-called Saturn bonds, provided by Morgan Stanley, and sold by Bloxham.
Bloxham was joined to the UK proceedings by Morgan Stanley for the purpose of claiming an indemnity and a contribution from the firm. In a counterclaim, Bloxham is suing Morgan Stanley for alleged breach of contract and losses arising from having been exposed to claims by its clients.
That action is to start before the Commercial division of the English High Court on June 18th.
Mr Wallace said he believed there was merit in allowing Bloxham to continue to participate in the English proceedings.
Arising from legal advice received, Mr Wallace said he believed continued participation in the English proceedings was more likely to advance the financial position of the liquidation.
Not taking part could result in a judgment being obtained against the company that would be extremely prejudicial to the winding-up, he added.
It was anticipated legal fees incurred in the forthcoming trial would amount to some £200,000 (€246,500), he said.
Mr Wallace was appointed the provisional liquidator after the High Court was informed last week that Bloxham was insolvent and unable to pay its debts.
The appointment was sought on grounds including that he would facilitate transfer of all client accounts held by Bloxham to Davy stockbrokers, to whom Bloxham had sold its private client business.
His appointment was also sought to safeguard Bloxham’s membership of the Irish Stock Exchange and to facilitate the sale of the membership to any interested third party.