Equitable abandons legal fight

Published on Saturday 3 December 2005 02:07

EQUITABLE Life yesterday abandoned its negligence claim against former directors in a long-running legal battle - as the troubled insurer also said it had received a "substantial" number of bid approaches.

Equitable dropped its claim against the remaining nine of 15 former board members it had accused of failing to act early enough to deal with the financial problems that nearly resulted in its collapse in 2000.

But in spite of the failure of its attempts to win 3.7 billion in compensation from former auditor Ernst & Young and 15 former directors, its finances had improved to the point where it had received a number of bid approaches for all or part of its business, chairman Vanni Treves said.

Treves said: "There are a substantial number of them and they vary a great deal in nature. Some are for the whole of the business, some are for parts of the business."

Treves refused to say whether the potential buyers included Prudential, Resolution Life, and the privately owned Life Company Investor Group, as media reports have suggested. He added: "It will be quite a long time before they have taken concrete shape and before we are in a position to say whether any of the deals on the table are better than the clear alternative option of allowing the society to run off [pay its existing policies and close]."

Equitable closed its doors to new business in December 2000 after the country's highest court, the House of Lords, forced it to honour guarantees on policies it sold in the 1970s and 1980s.

It sold its ongoing business to Halifax in 2001 and concentrated on staying afloat and honouring policies bought by its 600,000 customers.

In September, it abandoned its 2bn negligence suit against its former auditor Ernst & Young and has subsequently dropped its claims against all 15 former directors it had sued.