Northern Rock fails in secret memo gag order

A High Court judge yesterday allowed two national newspapers to report limited details of a leaked memo from troubled bank Northern Rock due to the public interest in the story.

But a partially-successful court injunction brought by the bank’s company parent Blackstone Group ruled that the memo itself must stay secret.

FT.com posted a copy of the memo, which was sent out to prospective buyers for company and contains confidential details about the Bank of England’s £20 billion loan, on its Alphaville blog.

The injunction also demanded that the The Daily Telegraph take down and reveal the source for story posted on its website on 8 November, which revealed details of the Northern Rock loan.

According to the Telegraph, the memo, which refers to Northern Rock with the codename ‘Blackbird’and the project to sell it as ‘Project Wing”, describes the mortgage lender as ‘the most cost-efficient bank in the UK”.

Northern Rock hired law firm Schillings to seek an injunction against both papers to take down their stories and not to refer to the memo’s details but Mr Justice Tugendhat said that stopping stories based on already published details was ‘futile”. He did however tell FT.com to take down a copy of the memo by 7pm yesterday.

The bank also attempted, unsuccessfully, to keep yesterday’s court hearing private.

David Price, the solicitor who acted on behalf of both papers said it was ‘strange that something published in The Daily Telegraph on November 8 has suddenly become confidential.”

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