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Tube hits Freshfields with £140m-plus negligence claim

We don't have the full details, but this seems like a client error, not a lawyers error. A put option could be at (i) par value, (ii) par + interest, (iii) outstanding debt, or (iv) market value. No sane minded investor would agree to (iv), as the market value degrades rapidly as the credit deteriorates, making the put option worthless. Even if LUL can show there was no express instruction on the point, I doubt they can show that they would have negotiated better. Now if the put option requires LUL to pay par when the debt has already been paid down (i.e. over 100 cents in the dollar), that might be a grounds for negligence.

25-Jul-2011

3:35 pm