Barclays is defending a £50m claim for losses linked to manipulation of the London interbank offered rate (Libor) brought by a three companies it placed in administration.
Rhino Enterprises Limited, Rhino Enterprises Properties Limited and Askwith Investments Limited (Rhino) purchased interest rate swaps (IRS) – products that were impacted by movements in the Libor.
It is one of the first cases to allege collusion by Barclays and other banks to manipulate Libor, and has been filed by Rhino as the companies end 18 months in administration.
Not all swaps products can be linked to Libor, but Collyer Bristow partner Stephen Rosen, who is acting for Rhino, told the Gazette: ‘A huge number of interest rate swaps were sold by reference to Libor. If the court was to decide in the Rhino case that Libor manipulation meant that Barclays swaps could be rescinded, the consequences for Barclays would be very serious.’
In a statement Rosen added: ‘In this case, false Libor submissions made rates unreliable if not meaningless and Rhino relied on Barclays’ representations when entering into unsuitable swaps arrangements that eventually triggered insolvency.’
The case management conference date has not yet been set, but will take place in either July or October. Barclays is advised by Clifford Chance partner Ian Moulding.