Couple sues Barclays for pounds 1m after firm's collapse
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Your support makes all the difference.Barclays Bank "pulled the rug" from under a couple after replacing a "fairy godmother" branch manager who lent them money to start up a business, a court was told yesterday.
Nigel Green, 42, and Yvonne Challis, 41, are suing the bank for around pounds 1m compensation, claiming the withdrawal of overdraft facilities forced the collapse of their haulage company. Until then, the local branch manager "encouraged" start-up loans and led them to believe they had the bank's continuing support, their counsel, Rhodri Davies, told the High Court in Cardiff. Mr Green and Ms Challis claim damages for breach of contract. Barclays, in a counter-claim, demands repayment of pounds 160,000 on an overdraft and interest charges.
In court, Mervyn Jones, former manager at Llandovery, Dyfed, was described as a "fairy godmother" who sanctioned the loan and a bridging loan for the couple to buy a smallholding.
Mr Davies said problems arose when Mr Jones left, suffering from stress. He said the manager had lent Mr Green more than he had authority for. Business had been conducted mainly by telephone or at meetings and the terms and conditions of the loan were never put in writing. In August 1991 Hywel George, Mr Jones's replacement, closed Mr Green's account.
Mr Green was convinced the bank was committed to supporting him and would not have started up the business had he not believed this to be so. Mr Davies said the case centred on whether Barclays had "the unfettered right to withdraw its support for Mr Green and recall its money whenever it thought it was in the bank's interest to do so".
The court heard that Mr Green borrowed pounds 40,000 in 1990 to buy lorries and improve access to his home near Pencader, Dyfed. When he met his bank manager in August 1991 he believed the bank thought his business was working satisfactorily. But five days later Mr Jones left and Barclays ordered a full inspection of the branch.
According to the bank's correspondence, its inspectors uncovered a "horror story" in aspects of the loans. "It was a fairly damning report as far as the bank's internal procedures are concerned," Mr Davies said.
The case continues today.
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