Charities lost a protracted battle against the banks.
The trustees savings banks which operated prior to 1986 had a tradition of charitable giving. When TSB Group plc was floated in that year there were established several charitable foundations. The Deed of Covenant dated 10 September 1986 by which TSB Group plc ("the Company") bound and obliged itself at quarterly terms to pay to the reclaimer the greater of "(a) the amount equal to one quarter of one third of 0.1946 per cent of the pre-tax profits (after deducting pre-tax losses) ... or (b) the sum of £9,730".
Following the banking crisis of 2009 and the takeover of Halifax Bank of Scotland, Lloyds Banking Group tried to change the terms of its relationship with the foundation. It wanted to half its donation and put its own staff on the foundation’s board. The following high-profile dispute resulted in the bank and foundation formally breaking their links, which will come into effect after nine years notice.
The foundation should have received £3,543,433 but the bank interpreted the small-print of accountacy rules to mean they were required to only pay £38,920 and has had this upheld by the Supreme Court.
The trustees savings banks which operated prior to 1986 had a tradition of charitable giving. When TSB Group plc was floated in that year there were established several charitable foundations. The Deed of Covenant dated 10 September 1986 by which TSB Group plc ("the Company") bound and obliged itself at quarterly terms to pay to the reclaimer the greater of "(a) the amount equal to one quarter of one third of 0.1946 per cent of the pre-tax profits (after deducting pre-tax losses) ... or (b) the sum of £9,730".
Following the banking crisis of 2009 and the takeover of Halifax Bank of Scotland, Lloyds Banking Group tried to change the terms of its relationship with the foundation. It wanted to half its donation and put its own staff on the foundation’s board. The following high-profile dispute resulted in the bank and foundation formally breaking their links, which will come into effect after nine years notice.
The foundation should have received £3,543,433 but the bank interpreted the small-print of accountacy rules to mean they were required to only pay £38,920 and has had this upheld by the Supreme Court.
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