UK's financial giant, Barclays has announced that it had reached a settlement with Graiseley Properties, the parent of Guardian Care Homes, which had filed a lawsuit against the company over its involvement in rigging the Libor interest rates.

The UK care home operator had sued the bank over losses suffered due to the rigging of the index. UK's second-largest lender was sued by Wolverhampton-based Guardian Care Homes for damages. Many market observers believed that it would a test case for others to determine if the bank can be sued on the matter. The care home was accusing the bank of mis-selling products linked to benchmark interest rates and senior Barclays employees and former executives were expected to testify in the case.

Graiseley Properties had said that interest rate hedging products that were sold to it were invalid becausebank had manipulated Libor rates. It had filed a law suit claiming 70 million pounds from the banking giant. The care home had decided to purchase two swaps to refinance loans with the bank between 2007 and 2008.

Barclays and several other lenders were fined for manipulating Libor or its euro equivalent Euribor by regulators in difference countries. Barclayshas lost several top executives, $5 billion of market value and is facing a government inquiry in the case. The bank is now facing a fine of a record 290 million pounds in the case.