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Lockyer accuses Berry over failure of BBNFS

Berkeley Berry Birch chief executive Cliff Lockyer has reignited the row over phoenixing allegations surrounding the closure of Berry Birch & Noble Financial Services. by blaming BBN founding director Derek Berry for his role in the subsidiary’s collapse.

Last year, Berkeley Berry Birch transferred BBNFS’s 150 advisers and their cli- ents to BBN Financial Planning, leaving the cost of pot- ential misselling liabilities for the Financial Services Compensation Scheme.

But with the FSA last week coming out with tough new measures to crack down on phoenix firms, Lockyer has broken his silence and blamed Berry for the fact that BBNFS ran up liabilities.

He says: “Berry should take responsibility for the failure of BBN. We had no choice but to let the company go into receivership. It was in the interest of the policyholders not just to let it go to the wall.”

But Berry says: “We had paid off 90 per cent of our pen- sions misselling liabilities and our liability was clearly understood. We never con-sidered winding up the company but Lockyer had, even though he raised 30m from product providers. You have to question whether it is worth the brand damage that BBB has suffered.”

Lockyer claims that BBB protected customers by leaving a professional indemnity insurance policy in place for six months after the closure of BBN Financial Services.

He says: “People have erroneously said that we dumped liabilities and set up a phoenix company. It is counter-intuitive to say that, in paying a considerable sum of money for the protection of investors, we are dumping liabilities.”

The FSA is still investigating the transfer of assets from the defunct subsidiary to BBN Financial Planning but Lockyer claims it is focusing on the valuation of assets and not on phoenix allegations. He says: “We are hopeful of reaching a conclusion with the FSA on this as soon as we can demonstrate that we bought the assets at the right value.”

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