Ex-CIO Logan on the real reason New Star collapsed

Speaking at the employment tribunal where Patrick Evershed is claiming unfair dismissal from New Star, Logan denied Evershed's claim that founder John Duffield's treatment of his staff was the reason New Star folded. Logan said moves to boost the company's dividend by taking on debt had instead played a major role in the asset manager's collapse. New Star took on bank debt and leveraged its balance sheet 18 months before it paid out a special dividend to shareholders in 2007, he said. By late 2008 its debt had spiralled and shares had tumbled in value, and it was eventually bought ...