It seems that, while the club and network was sold in February to Freedom Finance, there had been a rival bid from Scarborough.
A writ issued by the society's solicitor Addleshaw Goddard claims it spent £243,000 on external advisers and £102,000 internally as it prepared to buy Mortgage Next.
MN declined to comment following legal advice and Scarborough is remaining similarly tight-lipped, refusing even to answer questions about why it was looking to purchase a network in the first place and whether it plans to bid for another.
A spokeswoman tells Mortgage Strategy: “It is the society's policy not to comment on any transaction that may or may not have happened.”
The Building Societies Association says it is not surprised that with all of the concerns currently surrounding regulation, a society would seek to buy a network.
Rachel Blackmore, external affairs manager at the BSA, says: “Part of what any organisation must do is assess its needs and one of the things any business will be paying close attention to is distribution, particularly in light of the uncertainty before regulation”.
Other societies own networks such as Skipton which has Pink and Enable, and Manchester which owns Mortgage Broking Services.
However, the legal action has apparently left some at Scarborough concerned. One senior executive has been quoted as saying: “One wonders how the society got so far and spent so much without realising the deal was flaky.