Court appeal over Cattles decision

BONDHOLDERS owed millions of pounds by embattled sub-prime lender Cattles are appealing a court decision which could leave them empty-handed if the firm goes bust.

By The Newsroom

Published 7th Jan 2010, 21:21 BST

Updated 7th Jan 2010, 21:21 BST

A legal battle, which last year saw the Batley-based company sue its main subsidiary Welcome Financial Services, could end up in the UK's Supreme Court and take more than a year to resolve.

An anonymous Cattles bondholder known as party A is fighting on behalf of holders of bonds worth 750m and has filed an appeal with the Court of Appeal.

Banks, led by Royal Bank of Scotland, won an initial victory in December over who has first call on its assets. The court ruled in favour of banks based on guarantees given to them by Welcome.

Richard East, of law firm Quinn Emanuel, which represents the bondholder committee, said: "The bondholder committee were heartened by the first instance decision and are taking this matter to the next stage of appeal, and if necessary, the Supreme Court."

Cattles, which lent money to people with poor credit histories, is winding down its loan book.

No date has yet been set for the appeal.