(Bloomberg) -- Royal Bank of Scotland Group Plc’s progress in settling a lawsuit that would avert a courtroom showdown for former Chief Executive Officer Fred Goodwin is being hindered by investors who’ve gone missing.
Efforts to reach a deal with shareholders suing the bank over its billion-pound billion) emergency rights offering in are being held-up as lawyers struggle to contact some claimants in the suit, Jonathan Nash, a lawyer for investors, said at a London court hearing Wednesday where a judge agreed to delay the start of the trial for a third time.
Nash said he was “pleased to report that progress towards a settlement remains good and we remain hopeful.” He attributed the failures to sign a final accord to “logistical problems.”
RBS doubled its offer to investors as CEO Ross McEwan staged an 11th-hour personal intervention over the weekend, a person with knowledge of the matter has said. The trial, which was due to start Monday, has been postponed until June 7 while the claimants weigh the improved proposal and their lawyers locate investors who have gone missing over the years.
About 15 percent of the 9,000 retail shareholders suing the bank have died since Goodwin led the rights issue in the 2008 financial crisis, according to court documents. About 35 percent are pensioners, while 20 percent live outside the U.K. and 8 percent are described as blind trusts, which hold money on behalf of individuals.
Investors who participated in the rights offer say that the bank misled them and their shares were largely wiped out, after the U.K. government was forced to rescue the lender months later in a 45.5 billion-pound bailout. The court will hold an additional hearing for a progress report Thursday. Reuters reported late Tuesday that a number of shareholders in the 9,000-strong group remained determined to reject RBS’s latest offer.
It would be "fundamentally wrong" for an action to proceed on behalf of claimants whose whereabouts are unknown, Judge Robert Hildyard said during the hearing. "I regard this as a matter of substantial importance."
RBS increased its offer to 82 pence per share, up from earlier settlements of 41.2 pence and 43.2 pence with other claimants in the class action suit, the person familiar with the matter said. The Edinburgh-based bank had already inked settlement deals with three investor groups suing over the rights offer.
Goodwin is scheduled to testify next month, in what would mark a rare appearance for the Scottish banker who’s become something of a cartoon villain for many of the U.K. investors who sued.