Newcastle Airport appeals in bonus deals case

AIRPORT chiefs will bid to overturn a High Court ruling criticising them for a refinancing deal that cost the North East millions.

Newcastle International Airport

AIRPORT chiefs will bid to overturn a High Court ruling criticising them for a refinancing deal that cost the North East millions.

Bosses at Newcastle International Airport Ltd confirmed they will appeal last month’s ruling clearing Eversheds of negligence after former chief executive John Parkin walked away with a multi-million-pound bonus.

It comes as reports claim the airport could face court costs of more than £1m should the appeal fail, with £500,000 already being transferred to a holding account.

Last month, High Court judge criticised a deal that allowed Mr Parkin and the now-deceased finance director Lars Friis to earn bonuses worth £8.5m for securing a £377m re-mortgage deal.

The airport’s non-executive directors failed to check legal documents sent to them and the judge said the head of a crucial remuneration committee had experienced a “blind spot of massive proportions” over the bonuses.

A spokeswoman for the airport said last night: “After careful consideration regarding the recent High Court judgement in respect of its legal proceedings against Eversheds LLP, Newcastle International Airport Ltd has decided to appeal.

“Due to the legal nature of the additional action, Newcastle International Airport Limited is unable to comment further at this time.”

Questioned about the costs involved, the spokeswoman said: “Working in conjunction with its legal team, Newcastle International Airport Limited took prudent steps to mitigate its exposure to costs.

“Details of these steps are confidential.”

However, reports last night claimed the airport’s costs could total more than £1m should the appeal fail.

And it is understood the organisation has been ordered to put £500,000 in a holding account after the court ruled that it should be prepared to be held liable for Eversheds’ costs.

The legal team acting for the airport is believed to have lodged its intention to appeal on Friday.

The move comes shortly after one of the world’s biggest investment companies wiped more than £100m of debt from the international airport’s books as it became the operation’s new partner.

AMP Capital clinched a 49% stake in the organisation nearly five months after Copenhagen Airports confirmed it was selling off its interest. But taxpayers will still have to shoulder a £68m burden facing six of the seven local authorities – South Tyneside, Newcastle, Sunderland, Gateshead, Northumberland and Durham – who with North Tyneside are known collectively as LA7 and own 51% of the operation.

Elected Mayor Linda Arkley has refused to let North Tyneside take part in the debt restructure, claiming it was not among the council’s priorities. But without the contribution of AMP Capital, the local authorities could have had to find significantly more to refinance the debt.

It was feared each council could have had to find tens of millions to keep the airport operational, but last night it was claimed that all the cash they invested would be returned in full through dividends and interest.

The airport was due to refinance deficits totalling nearly £300m agreed by Mr Parkin in 2006.

The legal team acting for the airport is believed to have lodged its intention to appeal on Friday

 

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