By Steve Slater
LONDON, April 7 Barclays has reached a
settlement with a UK care home operator weeks before the start
of a court case that was seen as a test case for whether
customers might sue banks over the manipulation of Libor
Barclays had been accused by the care home operator of
mis-selling products linked to benchmark interest rates and
senior Barclays employees and former executives, including
former chief executive Bob Diamond, had been due to testify at
The case was being closely watched by banks and their
customers, after Barclays and several other lenders were fined
for manipulating Libor or its euro equivalent Euribor.
If Barclays had lost it was expected to open the door for
more bank clients to claim they were mis-sold products linked to
Graiseley Properties, the parent of Guardian Care Homes, had
claimed that interest rate hedging products it was sold by
Barclays were invalid because the bank had manipulated Libor
rates, to which some of the products' prices were linked.
It sued Barclays for 70 million pounds ($116 million).
Barclays said Guardian owed it the same amount, and was trying
to get out of repaying it.
"The parties have negotiated and agreed to a commercial
restructuring of Graiseley's debt, which reflects the impact of
changes in conditions in this sector over the last few years.
Graiseley has withdrawn the litigation," a spokesman for
Guardian Care Homes and its law firm could not be reached
The terms of the settlement were not released.
The battle in London's High Court was due to go to trial on
April 29 and had been expected to last for about six weeks. It
had been due to be the first case tied to the manipulation of
Libor to reach trial. Deutsche Bank is also involved
in a London court case tied to benchmark rates.
Barclays had already had to hand over thousands of emails
and other documents from its former bosses and staff.
Diamond, former investment bank bosses Rich Ricci and Jerry
del Missier, and former finance director Chris Lucas were among
23 people who had been called as witnesses for the trial.
Diamond and del Missier left Barclays in 2012 shortly after
Barclays agreed to pay a $450 million settlement with U.S. and
UK authorities due to alleged Libor manipulation.
Guardian Care Homes' lawyers had said a $4 billion fund run
by Barclays profited from low 3-month sterling Libor rates so
the bank benefited from the downward manipulation of Libor,
while at the same time selling customers an interest rate
hedging product "on the basis that Barclays believed rates would
($1 = 0.6020 British Pounds)
(Editing by Matt Scuffham and Mark Potter)