Government bailouts of banks are starting to spawn lawsuits. In Belgium, 140 small shareholders with the Belgian-Dutch financial services group Fortis have gone to court seeking compensation.
They are complaining that they were not consulted when the government broke up the cash strapped firm and they are angry with the company’s former bosses saying investors were misled.
Small shareholder George Frisque said: “It really is fraud. When you see the big bonuses and the salaries they awarded themselves, what’s being revealed today is a scandal. And with all this going, there are some in government who seem to be saying ‘it won’t happen again’ but who are not ready to meet out punishment for what happened in the past.’‘
Lawyer representing the shareholders say Fortis assets were sold at vastly reduced prices and their clients lost out.
A lawyer for BNP Paribas, Jan Meyers, which is buying Fortis assets in Belgium and Luxembourg responded: “They’re trying to question the transfers of assets which are an essential part of the Fortis rescue plan. It’s not in anyone’s interest to put that rescue plan at risk.”
Lawyers for the Belgium government, BNP Paribas and Fortis, said the decisions made were in everyone’s best interest, because otherwise Fortis would have collapsed, hurting customers and shareholders alike.