Newham Council has reached agreement with Barclays Bank to end litigation over historic lender option borrower option (lobo) loans.
The long-running litigation has been settled with what the London borough described as a “multimillion pound deal” that would enable it to reduce interest payments substantially. Newham said the deal freed up funds to invest in frontline services and avoided continuing lengthy legal proceedings.
Ten lobo loans were originally taken out by the council to the value of £238m between 2007 and 2008. In June 2018, Newham issued High Court proceedings against Barclays alleging fraudulent misrepresentation in relation to the loans and the subsequent London Inter-Bank Offered Rate (Libor) rigging scandal.
While the claim was struck out by the High Court in 2021, Newham had secured permission to appeal the decision before the agreement was reached this week.
The Mayor of Newham, Rokhsana Fiaz, said it was a “great result for Newham residents” and represented a “successful resolution” for the council.
“We will always stand up and get the best deal for our residents. This is why the council filed a High Court claim against Barclays Bank in 2018 and was prepared to pursue the case all the way if necessary,” she added.
A Barclays spokesperson told Room151: “We’re pleased to have reached a settlement with Newham Council on confidential terms.”
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