NMC Health joint administrator files $2.5bn claim against EY
Alvarez & Marsal, the joint administrator of the former private healthcare company NMC Health, has filed a High Court claim of at least $2.5 billion against the firm’s former auditor, EY.
Yesterday, Alvarez & Marsal revealed that as part of its “wide-ranging investigation into the situation” it has studied the role of the auditors and begun formal legal proceedings against EY in the UK for audit negligence concerning its work with NMC Health between 2012 and 2018.
According to The Times, in November 2020, it was revealed that Alvarez & Marsal was pursuing a lawsuit against EY and had issued a preliminary notice of potential claim. Alvarez & Marsal previously sent letters before action to 12 former NMC directors.
The firm said: “As administrators, we have an obligation to maximise returns for creditors and this action is part of those wider efforts.”
Alvarez & Marsal was joint administrators of the firm in April 2020 after an accounting scandal at NMC. A month later, The Financial Reporting Council said revealed that it was investigating EY’s audit of NMC’s financial statements for the year to the end of 2018.
A spokesman for EY said: “We are aware a claim has been submitted to the court by the administrators of NMC Health Plc. We will defend the claim vigorously.”