City grandee Bob Wigley sued over collapse of Yellow Pages-owner Hibu
City grandee Bob Wigley has been named in a multi-million dollar lawsuit relating to his time as chairman of Yellow Pages-owner Hibu and the company’s collapse in 2013.
The lawsuit, which was filed last week in the US, accuses Wigley and other directors and officers of the former FTSE 100 firm of deliberately crashing the company into administration six years ago, wiping out shareholders in the process.
It alleges Wigley, who it is said acquired some of the company’s debt in 2011, was conflicted in his negotiations with Hibu’s lenders who took control of the company after a court-approved pre-pack administration.
The lawsuit also alleges that Wigley and chief executive Mike Pocock, who died in December 2018, misled shareholders with positive updates about the company’s position, at the same time they moved cash to subsidiaries to prepare for administration.
Read more: Hibu shareholders hit out at former bosses
“Yell/Hibu shareholders…reasonably relied on the fraudulent and deceitful misrepresentations and omissions by the company’s officers and directors,” a claim form seen by City A.M. said.
“The conspiracy culminated when, in secret cooperation with its lenders, the company effectively divested itself of assets so as to qualify for ‘administration’…and extinguished the rights of its shareholders, with no compensation,” the claim said.
The suit accuses Hibu and its former directors and officers of deceit, fraudulent misrepresentation and negligent misstatement.
Wigley, who chairs lobby group UK Finance, has had a long and illustrious City career: chairing US investment bank Merrill Lynch’s Europe, Middle East and Africa operations, sitting on the UK’s takeover panel and acting as a member of the court of the Bank of England.
The lawsuit is being brought in Pennsylvania on behalf of more than 450 former shareholders in Hibu.
The law firm bringing the claim – Haines & Associates – also represented two former executives in a 2014 defamation claim against the company after they were dismissed amid accusations of a buyout plot.
Read more: Hibu-who? Iconic Yellow Pages brand set for big UK comeback
Chris Belcher, a founder of the shareholder action group, said the suit was being brought now after UK regulators opted not to take action.
“Everyone in the City just seems to want to turn their back on it, which is why we had to go abroad,” he said.
Yellow Pages-owner Hibu was spun-off from BT in 2001 and floated on the FTSE in 2003.
The company embarked on a debt-fuelled expansion, reaching a peak market capitalisation of more than £5bn in 2007.
Read more: Yellow Pages parent Hibu in administration
However, its directories advertising business was hit by the rise of the internet and it appointed former Polaroid boss Pocock in 2010 to lead an ultimately unsuccessful turnaround.
In 2012 the company changed its name from Yell to Hibu, which the lawsuit describes as “a new nonsensical and inexplicable lower-case name”.
Hibu collapsed into administration in 2013 with its lenders taking control after a debt-for-equity swap.
The successor company, which is controlled by its lenders, still owns Yell.com and also advises small businesses on digital marketing.