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Report: UK court orders Lloyds Banking Group to reveal insolvency terms with BDO

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Report: UK court orders Lloyds Banking Group to reveal insolvency terms with BDO

A British High Court judge has ordered Lloyds Banking Group PLC to reveal details of its insolvency agreement with the accountancy firm BDO relating to the administrative receivership of the property firm Ventra Investments, The Times reported.

The property firm entered administrative receivership in 2011, and subsequently went into liquidation.

Ventra had filed a lawsuit against Lloyds unit Bank of Scotland PLC alleging that it was damaged by mis-sold loans. Also, when the firm's properties were sold off, the administrative receivers from BDO were effectively under the bank's control, and so unduly favored the bank, according to the report.

Ventra's liquidators claimed that the accountancy firm enjoyed a preferred status on Lloyds' panel, which meant that BDO was not likely to sue the bank even if legal issues came to light, according to court documents.

The allegations are that the lender's relationship with insolvency practitioners may have undermined their impartiality and independence, the Aug. 26 report said.