Zero value of Northern Rock shares is upheld

by Iain Laing, The Journal Oct 7 2011

A TRIBUNAL has turned down an appeal against the decision that Northern Rock shares had no value after the Government bail-out.

Shareholders challenged the valuation of the Newcastle bank’s shares at zero after the value of government aid given when it was nationalised in February 2008 was subtracted.

The Bank of England bailed out the business with emergency funds in 2007 when money markets froze and investors started the first run on a UK bank for a century leaving the bank unable to gain funding by securitizing its mortgages.

The decision by the Upper Tribunal Tax and Chancery Chamber affirming the valuer’s judgment was published yesterday.

The tribunal judge Nicholas Warren wrote in the final decision: “We have before us no evidence that the Government damaged Northern Rock.”