It emerged this week that potential legal action by around 1,000 investors in split capital trusts against various fund managers may collapse as a result of financial concerns.
According to an Independent report published at the weekend, investors represented by London-based solicitors, Leon Kaye have been floored by Aberdeen Asset Management's refusal to launch a test case, as the investment firm does not believe that there is a legal case for it to answer. This could mean that court action will prove too costly for the affected investors.
Speaking to the Independent, an unnamed Leon Kaye source revealed that:
'We're having another meeting with our barrister next week. We have got to decide on the way forward, but I can admit that the problem is money and that's what Aberdeen is counting on. Unless something changes I don't immediately know the way forward.'
According to the report, Leon Kaye had wanted to use Aberdeen as a test case for actions against various other fund managers, including the manager of the BFS Income & Growth Trust, Dartmoor Investment Trust, and the Framlington Split Capital Trust.
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