Former Equitable directors' assets lift settlement hopes

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The Independent Online

Two of the former directors Equitable Life is pursuing over the collapse of the mutual life assurer have a combined fortune of £410m.

The sum is much higher than some Equitable watchers had expected and will raise hopes that the society may be able to wring a substantial amount from the 15 directors on its board between 1993 and 2000.

David Wilson, a non-executive of Equitable between 1994 and 1999, is worth £320m. He is head of the family business, the construction giant Wilson Bowden and owns a stake worth £300m plus other holdings.

Sir Christopher Wates, a non-executive before 1996, has a family fortune of £90m. Sir Christopher's family also made their money in the building trade, building up the eponymously named company.

Equitable will only be able to tap Sir Christopher's wealth if the House of Lords rules in an unrelated case that people can be sued for their actions more than six years ago, which is the current time limit.

The majority of Equitable's directors are of far more modest means, making it impossible for the society to recover the £3bn of damages it believes the group are liable for.

Most of the main board in the 1990s spent almost their entire working life at Equitable, on relatively modest salaries compared to industry standards.

Current estimates of what Equitable might recover, if its case is successful, stand at between £20m and £30m and it is thought likely that the courts will see a distinction between the culpability of executive and non-executive directors.

The main source of compensation would be from the directors' insurance. This was rumoured to stand at £5m per director at Equitable, but it is likely to be a lot less.

In the UK even very large companies do not normally take out cover for directors of more than about £20m, but Equitable may have increased its provisions over the course of the 1990s, as it got into more and more difficulties.