NMC Health - Case Update

A £2 billion claim brought by the joint administrators of NMC Health against EY, the former auditors of the collapsed healthcare group, is heating up, with the former chairman of the audit committee now giving evidence to support the negligence claim.

Richard Fleming, Mark Firmin and Ben Cairns of Alvarez & Marsal were appointed joint administrators of NMC Health in April 2020 after the company, which was listed on the official list of the FCA and the London Stock Exchange, made a series of announcements to the market disclosing borrowings totalling in excess of $4.1 billion, the existence of a suspected fraud and a number of changes of board members, including the removal of the CEO.

Following their appointment, the joint administrators began investigating potential claims against EY and the former directors of the company. In April 2022, the joint administrators filed the particulars of a £2 billion claim against EY. The claim alleges audit negligence with respect to EY’s work with the company between 2012 and 2018.

The trial officially commenced last month and is set to continue until the end of July 2025. Closing arguments are expected to take place in mid-October 2025.

Interestingly, former non-executive director Patrick Meade, known as Lord Clanwilliam, who was also the former chairman of the audit committee, has reportedly given evidence at the trial against EY as part of a settlement reached with the administrators. Lord Clanwilliam testified that, until a Muddy Waters report in late 2019, he did not have any suspicions that something was amiss.

In addition to the claim against EY, the administrators are pursuing other avenues of recovery, including claims against former directors, recently reporting that they have received $6.5 million in relation to a settlement agreement with one former director.

Given the ongoing matters remaining in the administration, the administrators have obtained a further extension to the administration, which is now due to end on 8 April 2028. Based on current estimates, it is anticipated that unsecured creditors will receive a dividend.

Read the administrators’ latest report HERE. They have been assisted by DLA Piper and Quinn Emanuel.