Newcastle International airport is appealing against a High Court ruling in a bid to claw back money after two of its airport chiefs negotiated multimillion-pound bonuses for themselves just for taking out a loan.
Former Newcastle airport chief executive John Parkin, currently chief executive of Leeds Bradford airport, and now-deceased finance director Lars Friis, arranged to receive large payouts on a £377 million mortgage as part of a refinancing deal for the airport with the Royal Bank of Scotland in 2006.
Parkin and Friis had law firm Eversheds write into their contracts that they would receive a percentage of the loan amount as a bonus, with both receiving a total of £8.5 million.
In reports last week, the airport announced it would appeal against a ruling that cleared Eversheds of negligence over the refinancing deal, after the airport argued earlier this year in court that the law firm should have notified the airport’s independent remuneration committee that, due to the financial bonuses, the two directors had conflicting interests.
Airport bosses had alleged that Eversheds was in breach of its duty when accepting the instruction, but earlier this year, a High Court judge said that the law firm had acted in “good faith”.
The remuneration committee of five people approved the bonus package in September 2006, and was chaired by Rosemary Radcliffe, who had been notified of the changes to the contracts drawn up by Eversheds that gave the two men the bonuses, but she failed to read the details.
In the court case earlier this year, the judge gave a scathing critique of Radcliffe, saying she had a “blindspot of massive proportions”.
Radcliffe resigned from her position six months after the executive directors were paid their bonuses, and a month later, in November 2007, she stepped down as a non-executive director for Northern Rock.
A spokeswoman for Newcastle airport confirmed to Travel Weekly that it has decided to appeal the recent High Court decision.
She added: “Due to the legal nature of the additional action, Newcastle International Airport Limited is unable to comment further at this time.”
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