Just when Banks had thought the interest rate swap scandal had blown over, another courageous business has filed a £32 Million Pound Claim.
Michael and Diane Hockin, husband and wife who are also in business together, have filed a £32 million pound claim against Nat West Bank and the Royal Bank of Scotland. They claim that their company was sent into administration because of the banks’ interest swap package. A business is put into administration when it does not have enough funds to cover its debts. Businesses can also be put into administration if they fail to repay debts when they are required to pay. The couple has stated that they were mis-sold the interest swap deal back in July 2008.
The Interest Rate Swap
Micheal and Diane Hockin turned London and West Country Estate into a business park company, which is worth millions of pounds. The business park company has properties across the southwest. Micheal and Diane Hockin have been in business for many years. However, in March 2012, their business was put into administration because of the swap package.
Ever since their business was put into administration, the couple has been trying to prove that the swap arrangement was the reason that they had lost their business. However, this battle has been a costly and long battle. Despite the fact that the couple has had a lot of trouble proving their case, it has taken a few turns for the better. Earlier in 2014, the couple did manage to win a landmark case. The claim that they filed against the bank has been assigned to Ernst Young.
The case has recently taken another significant step. Alison Loveday, who is the Hawkins’ solicitor and Lonwest LTD, which is their vehicle company has filed a claim on their behalf. The claim alleges that the banks misled the Hockins and did not tell them about the risks of taking out the interest rate swap package. The claim also alleges that the bank did not comply to industry rules and regulations. The banks also failed to tell about the couple about the huge price they would be required to pay if they wanted to exit the deal. Breaking the swap could have cost them up to 10 million pounds.
Additionally, the couple, as the rest of the world are aware of the manipulation of the LIBOR rate. LIBOR is short for London-Bank Offer Rate. LIBOR is the rate at which a bank charges another bank for a loan. Michael And Diane Hockin believed that they were protecting their business by taking the interest swap deal. However, it turned out to be quite the opposite.
The loan was placed into the hands of the Global Construction Group by the Royal Bank of Scotland. The debt was sold in January 2012 to Isobel. Isobel is the company that put the couple’s business into administration.
In the case summary, it states that the banks were well aware of the fact that they were dealing with people who did not understand the interest swap complexity, but they decided to sell it to them anyway. The interest costs were increased under the contract. The bank also tried to say that there were breaches in the loan to value. This is why the couple’s loan was placed in the hand of the Global Construction Group, which ended up putting the couple into administration.
Mr. Hockin stated that he and his wife spent 30 years building their business, and they have had it destroyed because of the bank’s dishonesty over the interest rate swap. He is really disappointed that he and his wife spent many years of their lives working for something just to have it taken away from them. The couple’s business had been very successful before it was put into administration. He also stated that he and his wife are not only fighting the case for themselves, but they are also fighting it for other people who have been in similar situations.
Thousands of people have lost everything that they had because they did not understand the dangers and the true effect of the interest rate swap. These interest rate swap have not only caused people to financially suffer, but it has also ruined lives in many cases. These problems could have been prevented if the banks would have been honest with people and let them know what they were getting into before they signed the contract.
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