B&B shares are worthless, finds review

Bradford & Bingley (B&B) shareholders had their hopes of compensation dashed today after an independent assessor upheld his previous ruling against a payout.

Peter Clokey, the independent valuer appointed under the Bradford & Bingley plc Compensation Scheme and a partner of PwC, published his decision today in a Revised Assessment Notice.

The review backs his original decision from July last year that ordinary shares in the nationalised bank had no value immediately before their transfer to HM Treasury.

Consequently, no compensation is payable by HM Treasury to former shareholders or those who held subscription rights to the shares, he says.

About 8,000 of the 930,000 former shareholders wrote to Clokey to contest his ruling last year, and to request he reconsider his decision.

But in a statement issued yesterday, PwC says: "After careful consideration of all these submissions and having regard to the statutory assumptions under which he is appointed, Mr. Clokey remains of the view that his original determination is correct."

Clokey decided the liquidity position of B&B would have prevented it from continuing as a going concern, and if HM Treasury had not used its powers it would have been forced to apply to the Court for an administration order.

An administration of B&B would not have generated sufficient cash flows to create a surplus that would become available for distribution to shareholders, he says.

The government was forced to nationalise B&B in September 2008, making British taxpayers liable for more than £150bn of toxic mortgage debt. B&B still owes the government around £20bn.