The legal action by PricewaterhouseCoopers sought to recover £3 million in dividends that were declared by Simclar Ayrshire in June 2006, just months before the business was closed down. Administrators questioned the legality of the dividend payout.

The case was due in Edinburgh Court this month. Details of the agreement have not been provided.

104 former employees at Simclar's Dunfermline plant were awarded payouts totaling around £1.1m last month, due to unfair dismissal.

Source: Mark Williamson,