Why is Northern Rock like a truffle?

13:37
Grabiner wasted no time in rubbishing the arguments put forward by shareholders, but – perhaps in deference to the aggrieved Geordies in court – he was not his usual flamboyant self.


Why is Northern Rock like a truffle?16-January-2009, 13:37

Grabiner wasted no time in rubbishing all the arguments put forward by shareholders large and small, but – perhaps in deference to the busload of aggrieved Geordies in court for the duration of the trial – he was not his usual flamboyant self.

Renowned for his love of a good old-fashioned courtroom argument, Grabiner was somewhat subdued when he addressed the court from Wednesday lunch to Thursday lunch (with a merciful overnight break in between).

Had the hedge funds been making their claim without the backing of the UK Shareholders Association, whose members actually lost their life savings when the Rock was nationalised, his performance would surely have been more severe.

As it stood, Grabiner was at his most severe when faced with the irregular temperature within the courtroom.

And his concerns about the heat on Wednesday were clearly heard because by Thursday a multitude of open windows meant those in the public gallery nearly froze. Not that Grabiner cared – he was there to work, so if he wanted the windows open, open they would be.

Other than the ventilation, the highlight of the latter part of the trial was Pannick’s likening of a shareholding in Northern Rock to ownership of a truffle.

What if, Pannick posed, said truffle was locked in a box that only one locksmith had the powers to open?

What if the truffle’s owner agreed to pay the locksmith to open the box only to find that the locksmith, reasoning that without his help the truffle would have rotted to nothing, decided to keep the treasure too. Would that be fair?

Could that be what the Government, acting as grand locksmith overlord to Northern Rock’s truffle core, had done in nationalising the bank and failing to compensate its shareholders?

Only Burnton LJ and Silber J can answer that question. But you’ll have to wait six weeks for the answer.