The group now in charge of the pension fund, the Law Debenture Trust Corporation, served a writ last week accusing Greig Middleton of negligence in over-valuing a Belling subsidiary which was then sold to the fund. Belling's former auditors, Hereward Philips of North London, are also being sued in the action for up to pounds 5.5m.
The legal claim is the latest attempt by Law Debenture to retrieve more than pounds 6m which was paid out from the fund before Belling called in the receivers. Next week is the fifth anniversary of the company's collapse. Some fund members who retired after the collapse of Belling are receiving less than half their pension entitlements.
Greig Middleton was employed by the pension fund trustees in October 1991 to value Compound Sections, a Belling subsidiary which the trustees intended to sell to the fund to raise badly needed cash for the parent company. Though around half Compound's sales were to Belling, which was then in severe financial difficulties, Greig Middleton said it was worth pounds 5.25m.
The High Court writ alleges Greig Middleton should have realised Compound Sections was so heavily dependent on Belling that the true valuation should have been pounds 2.75m. The claim also says Greig Middleton made did not do enough to establish whether the cooker maker was solvent. According to the claim Belling already owed Compound pounds 503,000 in June 1991.
After receiving the valuation the fund trustees, who included Richard Belling, the company chairman, and the finance director Michael Stewart, raised the purchase price to pounds 5.5m. This amounted to about a quarter of the entire pension fund assets. Compound was later sold by the fund following Belling's collapse for just just pounds 1.4m.Reuse content