Barclay Brothers Avoids Bankruptcy: HSBC Drops High Court Appeal After IVA Deal
Aidan and Howard Barclay, the eldest sons of the late Sir David Barclay, have come out of bankruptcy after striking an eleventh-hour deal with creditors that led HSBC to drop its High Court pursuit of the brothers.
At a hearing on Tuesday, the bank’s lawyer Matthew Abraham told Judge Burton that HSBC is now seeking to have its bankruptcy proceedings withdrawn following the approval of an Individual Voluntary Arrangement (IVA), a legal alternative to bankruptcy that allows creditors to settle their obligations with creditors on agreed terms.
“In these circumstances, the applicant is seeking dismissal of the applications following the approval of the IVA,” Mr Abraham told the court. The court was told that the plan was referred to a meeting of creditors last Tuesday. Judge Burton said he was “satisfied with the circumstances” to allow the dismissal. The terms of the agreement remain confidential.
For Aidan, 70, and Howard, 66, the decision brought some relief after the disastrous run of the once-powerful Barclay business empire, although it did little to hide the amount of money that has been drained from the hard-earned money of their father and twin brother, Sir Frederick, over the past decades.
HSBC filed for bankruptcy against the brothers in December, citing large sums of money it owed as a result of the collapse of the family business. The bank has so far repaid £1.2 billion of a £143.5 million loan from the management of Logistics Group, the parent company behind Barclay-owned parcel carriers Yodel and ArrowXL.
The Logistics Group went into administration in March 2024 after HSBC pulled the plug on its property and the business appeared to be insolvent. The collapse was a hammer blow not only to the family’s balance sheet but to thousands of SME merchants who rely on Yodel as a cost-effective alternative to the leading carriers.
In a previous hearing in late March, HSBC raised “various issues regarding the assets, who owns them and where they come from”, language that points to the bank’s reservations about the brothers’ initial proposals to lenders. That those concerns appear to have been sufficiently addressed to secure approval marks a significant, if quiet, victory for the Barclay camp.
IVA is the latest chapter to open one of Britain’s most secretive royals. The family, in short, lost control of a chain of award-winning properties including the Daily Telegraph, the Sunday Telegraph and The Very Group, the online retailer formerly known as Shop Direct.
Last month, Axel Springer, the Berlin-based media group behind Bild and Politico, agreed to buy the Telegraph Media Group for £575 million, seeing off competing bids from the Daily Mail and Lord Rothermere’s General Trust. The sale ends an ownership saga that began when Lloyds Banking Group took over the Telegraph in 2023 over unpaid debts owed to Barclay family companies.
In Britain’s SME community, the Barclay saga is more than a paper spectacle. It stands as a cautionary tale of the dangers of leverage, the speed at which a long-established empire can unravel when creditors lose patience, and the practical use of the IVA approach for business owners looking down on personal debt for business debts. Restructuring practitioners have long argued that IVAs are often underutilized by directors of failed businesses who often fail to pay legally at great personal and professional cost.
Whether the brothers’ arrangement still exists, and what it will ultimately mean for HSBC and its wider creditors, will not be known for a long time. But for now, at least, Aidan and Howard Barclay live to fight another day.
