Co-op Group has successfully defended a legal claim worth more than £450 million linked to its ownership and later sale of the Somerfield supermarket business, after the High Court dismissed all claims against the retailer and its subsidiaries.
In an update issued on Thursday, Co-op Group said judgment had been handed down by Mr Justice Cawson following a trial held across January and February this year, with the court dismissing all claims brought by the liquidators of The Food Retailer Operations Limited.
The case centred on transactions undertaken in 2015 and 2016 relating to the Somerfield supermarket business, which Co-op acquired in 2009 for £1.565 billion before later selling it in 2016 to The Food Retailer Group Limited, part of retail investment group Hilco.
Liquidators acting for The Food Retailer Operations had alleged that Co-op stripped Somerfield of its most valuable assets prior to the sale and brought a transaction-at-an-undervalue claim reportedly worth around £500m.
The original claim, disclosed by Co-op in February 2023, sought more than £450m plus additional unquantified interest and costs.
At the time, Co-op said it “strongly disputed” both liability and the value of the claim and pledged to defend the proceedings vigorously.
The trial began in London earlier this year, with liquidators arguing that transactions linked to the Somerfield disposal had disadvantaged creditors following the collapse of The Food Retailer Operations.
Following Thursday’s ruling, Co-op said it was “pleased” that all claims against Co-operative Group Limited and relevant subsidiaries had been dismissed.
The judgment removes a significant legal overhang for the retailer at a time when the business is pursuing wider strategic changes, including its proposed acquisition of Southern Co-op, which this week secured approval from the members of the regional society.