Portman/Nationwide merger - membership rights

Compound_2

MarkyMarkD, there are a number of alternative interpretations a court could take, for example:
- The clause doesn’t say that there has to be a two year gap in membership, it just counts two years from a DAY on which membership ended.
- Existing Nationwide contracts should be unchanged by the merger: as you pointed out any Portman signaways are cancelled for dual members. So the two year period should be counted as if the merger had not happened.
- Portman membership should take precedence over closed Nationwide membership. The Nationwide signaway has wording such as ‘By applying to open an account’; ‘if the account is opened’ i.e. referring to membership by you opening a Nationwide account, not Nationwide taking over an account elsewhere. By closing your Nationwide account before the merger, it is clear that you do not consent to the signaway applying to your Portman-originating membership and it would be unreasonable to impose it on you.

MarkyMarkD

I think all your suggestions are sensible and relevant, but let's be honest - nobody is going to go to court over this.

The whole state of affairs is an unholy mess which Nationwide have caused through their original (daft) sign-away idea - itself an unholy notion that the BSA's members came up with to protect their happy little existence.

mikbruin

I'm glad i'm not the only one who thinks thinks this is totally unfair.
Without reading this article I spoke to one of the directors at NW on Monday, and asked for a formal response.
Although they have told me nothing will change, it was confirmed that there was a way round this, if my NW account was closed for 2 years before the merger. I am awaiting a full written response and the remedy from this director, and would be happy to copy it to anyone who is interested. Please email me at Miksellers@f2s.com

Compound_2

MarkyMarkD wrote: »

I think all your suggestions are sensible and relevant, but let's be honest - nobody is going to go to court over this.

Nobody will go to court over the current merger, but in the unlikely event that Nationwide demutualized while applying the signaway, I think it would end up in court.

Interesting post from mikbruin. It wouldn't be possible to close your NW account 2 years before the merger on 28 August 2007 because it was announced less than a year before, on 12 September 2006. But note the interpretations of the 2 year rule in my posts above.

MarkyMarkD

I'm assuming that mik meant 2 years before any future takeover/demutualisation. But I may be wrong.

plumb1_2

Compound wrote: »

MarkyMarkD, there are a number of alternative interpretations a court could take, for example:
- The clause doesn’t say that there has to be a two year gap in membership, it just counts two years from a DAY on which membership ended.
- Existing Nationwide contracts should be unchanged by the merger: as you pointed out any Portman signaways are cancelled for dual members. So the two year period should be counted as if the merger had not happened.
- Portman membership should take precedence over closed Nationwide membership. The Nationwide signaway has wording such as ‘By applying to open an account’; ‘if the account is opened’ i.e. referring to membership by you opening a Nationwide account, not Nationwide taking over an account elsewhere. By closing your Nationwide account before the merger, it is clear that you do not consent to the signaway applying to your Portman-originating membership and it would be unreasonable to impose it on you.

Nationwide will never use the signaway clause imo, as they will need over 75% of members to vote yes, if they were to change to a Plc.
And with over 50% of members who wont qualify(as per signaway clause) they wouldn't get the YES VOTE.
So they will invalidate the clause to enable a Yes Vote.

So dont worry about it, when the time comes everyone will get a payout.

Converting to a plc is a different ball game than a merger.

ps, in the Plumb household we have Natonwide accounts(signaway) and Portman accounts, we dont intend to change anything regarding signaways.

But do intend to close Portman account after the payout;)

Milarky

Going wider than just the Nationwide/Portman merger question, I wanted to ask again (I think I've asked it elsewhere) of whether there has ever been a single instance of sign away clauses applying 'in anger'?

As already stated, a demutualising organisation requires 75 percent support of 'members' before it can change status. All 'sign aways' are, by definition 'members' also - with equal votes.

There is the theoretical possibility that a Board of a mutual could propose demutualising whilst seeking to apply the provisions of these clauses - on the assumption that they can explain to sign aways that they shouldn't stand in the way of non-sign away customers even though they they won't gain directly from either supporting the proposition or just not voting. Stranger things have happened (The government persuading punters to subscribe to BP shares at a higher fixed price than the depressed shares temporarily were trading in the market in 1987 comes to mind!) There's also the high 'astention' rate in all of these ballots - which only require 75 percent of those voting

But, realistically, no Board is going to take such a gamble (which is why I asked the question of anyone's knowledge or memory on that point) I doubt there ever has been an application (or failure to waive) the provisions of a sign away clause - and I doubt there ever will be for those reasons.

That just leaves existing Boards who 'remain' opposed to DM. They have to go through the motions of saying that sign away clauses are meant to 'protect' customers of mutual organisations from 'carpetbaggers' (which they sort-of do if everyone goes alone with the fiction) BUT then fail to mention that such clauses are no 'protection' from from Boards themselves when they have a change of heart. When that happens the same clause can be revoked.

We know that Standard Life had a clause of its own and then revoked it (1 example) Are there any more?

MarkyMarkD

I don't believe that there is a single example of a sign away applying in practice.

I had forgotten that SL over-rode their own sign away clause. But others (particularly Nationwide) would claim that the clause is copper-bottomed and that it cannot be over-ridden. Maybe it depends on the specific wording, maybe sign aways are a fiction.

plumb1_2

MarkyMarkD wrote: »

I don't believe that there is a single example of a sign away applying in practice.

I had forgotten that SL over-rode their own sign away clause. But others (particularly Nationwide) would claim that the clause is copper-bottomed and that it cannot be over-ridden. Maybe it depends on the specific wording, maybe sign aways are a fiction.

When the greedy board of directors wish to convert and get the £Millions, they will amend the clause to do so. Stating it is for the benifit of OUR memebrs. Just like SL did.

bristolleedsfan

plumb1 wrote: »

benifit OUR memebrs. .

u been drinking or sat in the sun mr plumb or are your keys sticky :rotfl: