Key Lloyd's name bankrupted: Leader of investors' group blames losses in market after bank acts over pounds 2.86m debt

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The Independent Online
A PROMINENT Lloyd's name has been bankrupted as a consequence of his losses in the insurance market.

Christopher Stockwell, chairman of the Lloyd's Names Associations' Working Party, was made bankrupt on 21 June by Private Bank and Trust Company, a small bank with wealthy private clients.

Mr Stockwell said he had faced large consequential losses because of his investment in Lloyd's as well as direct losses from his membership of 70 syndicates.

He added: 'Bankruptcy is not a situation anybody chooses.' He said it was regrettable that PBTC had been unwilling to reach an agreement and had insisted on taking this action for no apparent commercial motive.

He did not know whether it had consulted Lloyd's about its action, but it was most unusual for the petition to have cited his occupation as chairman of the most high-profile of the groups of names.

Private Bank and Trust Company filed its petition against Mr Stockwell in Banbury County Court, Oxfordshire, last August. The amount of the debt was pounds 2.86m. A spokesman for the bank, controlled by the Swiss- Greek Latsis family, said it never discussed clients' affairs.

Mr Stockwell said that many names were hit when Lloyd's called in the deposit from the bank that had guaranteed it and the bank subsequently started proceedings. Others had got into difficulty by taking out mortgages to pay their losses.

Mr Stockwell, who had already lost his house and family business because of Lloyd's, will not have to sell his home again. The family now rents a house in the same Cotswold village.

The Official Receiver will be able to dispose of other assets to pay the debt. Mr Stockwell will have to notify his earnings and will be permitted a living allowance. He has received token payment as chairman of the umbrella association for Lloyd's names' action groups and additional consultancy fees during the past year.

Undischarged bankrupts have to close their bank and building society accounts and cannot obtain credit of more than pounds 250 without revealing their status. However, after three years the slate is wiped clean.

Lloyd's says it does not force names into bankruptcy. They are able to apply to the hardship committee, headed by Lady Archer, to reschedule their debt.

The hardship terms are considered too onerous by many names. Lloyd's demands that all their assets and income above relatively modest thresholds are made over to it. It also recognises no time limit on the debt. Another heavily indebted name said: 'Bankruptcy gives you one thing that Lloyd's does not, and that is finality.'

Lloyd's has issued 176 writs against names and written to 3,000 threatening legal action. As many as 5,000 have Lloyd's losses greater than their assets.

However, names report that the legal process seems to be at a standstill. Some 3,500 have joined organisations such as the Writs Response Group and Names' Defence Association, which help with delaying tactics, including challenging Lloyd's estimates of interest costs and exchange rates.

The Writs Response Group estimates that there have been as few as 30 Lloyd's-related bankruptcies among its members.

Many names believe that Lloyd's will not take any further legal action until a judgment is made in the Gooda Walker case being heard in the High Court.

Lloyd's has already written to names in the US suggesting they negotiate payment of their losses. US bankruptcy laws are far more generous - bankrupts are rarely forced to sell their houses, for example - so the hardship process has little attraction for US names.

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