LONDON, Sept 8 (Reuters) – A British court has given the green light for a compensation case brought by bondholders suffering losses from the collapse of London Capital & Finance (LCF) to be heard, lawyers said on Tuesday.
The bondholders are seeking a judicial review of how their claims for compensation have been largely rejected.
LCF went into administration in early 2019 with losses of up to 237 million pounds ($311.6 million) after the Financial Conduct Authority (FCA) directed the firm to withdraw promotional material for so-called mini bonds.
The Administrative Court has given permission for the case to be heard, said Thomas Donegan, a partner at law firm Shearman & Sterling, who is acting on bondholders’ behalf.
“We feel confident in our arguments and look forward to presenting them to the Court,” Donegan said.
Britain’s Financial Services Compensation Scheme (FSCS) said in January it could only help 159 of 11,600 investors holding LCF bonds.
The claimants allege that the FSCS decision contained errors in law and fact and is “irrational”, while the FSCS has said it was following the rules.
The Court can quash or uphold the FSCS’ decision.
($1 = 0.7606 pounds)
(Reporting by Huw Jones, editing by Louise Heavens)
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