A group of Danish institutional investors is taking legal action against two banks over 767 million Danish kroner ($108 million) in losses related to the collapse of a company.
The 748.5 billion kroner ATP, Hilleroed, is among the investors claiming damages from Morgan Stanley and Carnegie Investment Bank for "prospectus liability." The fund said in a news release that the consortium of 24 investors had sustained a combined 767 million kroner loss following their investment in marine fuel company OW Bunker, which went bankrupt in 2014.
The claim is made "on the basis of a prospectus which was insufficient in material aspects," said the release.
The move extends an existing claim for damages. A number of Danish institutional investors launched an investigation into the firm's bankruptcy in December 2014, aiming to determine whether there was a basis to claim legal liability. The investigation focused on errors and deficiencies in the prospectus that was prepared in connection with OW Bunker's initial public offering, liability in connection with the offer and sale of shares in the firm, and management liability in connection with the operation of the firm, the news release stated. Legal proceedings began in April 2016 "with a view to obtaining compensation and determining responsibility. The action is pending before the Danish Eastern High Court," said ATP in the release.
Commenting in the release on behalf of the consortium of investors, Tomas Kruger Andersen, head of legal, investments at ATP, said: "The consortium has decided to extend the group of defendants to include the issuing banks Morgan Stanley and Carnegie. This decision is based on new information in extensive exhibits from the bankruptcy estate, which we were given access to only this spring. We believe that the banks knew about OW Bunker's speculative activities and that the banks contributed to misleading investors. Against this background, we believe that they may be liable to pay damages." The suit originally was filed against OW Bunker, the board and management.
The consortium reserves the right to continue to involve additional parties or bring new actions, the release continued. The investors are represented by law firm Bruun & Hjejle.
A Morgan Stanley spokesman declined to comment. A Carnegie spokesman was not immediately available to comment.