The troubled Co-operative Bank is facing a claim of £1m from former employees who argue that they were due bonuses from the business.
The former employees now work for Royal London Asset Management, which bought the life insurance and savings arms of the Co-op earlier this year. The operations were sold as part of the Co-op's efforts to find capital and the new owners are not liable for the ongoing claim for unpaid 2012 bonuses.
The Co-op would not comment but it was reported that the bank had not paid any bonuses for 2012 because of the losses incurred by the group that year.
The bank is asking bondholders to help raise £500m of the capital needed to meet regulators' demands. However, it is facing resistance from investors, including 15,000 private bondholders who are lobbying regulators about the rescue deal.
The Prudential Regulation Authority, the City regulator, has already stopped the Co-op making £7m of payments to bondholders until the finances of the business have been shored up.
Its results are due to be released on 29 August – a week later than first scheduled – and will provide the backdrop for the group to issue a prospectus that will outline the deal to be offered to bondholders. Assuming the deal goes ahead as intended, shares in the Co-operative Bank will be listed on the London Stock Exchange for the first time as bondholders are offered shares.
The problems with the bank's finances contributed to its failure to take over 631 branches from Lloyds Banking Group, which is now planning on floating the branches on the stock market under the TSB brand. The branches will appear under the new logo on high streets on 9 September.
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