Michael Bright, the founder and former chief executive of Independent Insurance, has declared himself bankrupt, dashing creditors' hopes of seeing any repayment of their debts in the foreseeable future.
Independent Insurance has been in the hands of provisional liquidators, PricewaterhouseCoopers, since June. The company's dramatic collapse is the subject of investigations by the Serious Fraud Office and the Financial Services Authority.
Mr Bright, who is taking early retirement, said yesterday he was having to sell both his family home in Kent and a flat in Wapping, having already sold his car, a Jaguar E-type. He now borrows his daughter's car.
"It's a pretty bitter pill," Mr Bright said. "I'm very confident that when this is all over my case will be properly understood in a positive way."
He added that he had not been contacted personally by any of the authorities investigating the collapse of the company, and did not expect to be.
Mr Bright is now legally declared as being unable to pay his debts, having filed for bankruptcy in the High Court earlier this month.
His main creditor is HSBC Republic Bank, the private banking unit of HSBC Holdings. It had been suing Mr Bright over repayment of a £4.28m loan, along with daily interest of £850, but has now dropped the case. The loan dates back to 1993 and has been renewed each December. Mr Bright said he had used the money to purchase more shares in Independent Insurance.
HSBC accepted Mr Bright's 6.1 per cent shareholding in Independent Insurance as collateral. The shares are now worthless and HSBC must queue up with other personal creditors, whose claims will be adjudicated by a trustee to be appointed by the courts. The process is expected to take at least three years.
His principal personal asset is a pension previously valued at £11m, although half of it is invested in Independent Insurance shares. Aside from his UK properties, he also owns a holiday residence in Spain and shares in various companies. The Kent property is jointly owned with his wife. It is unclear whether the other assets are registered in Mr Bright's name.
Creditors to Independent Insurance are still weighing up legal action against Mr Bright and other former directors, the Financial Services Authority and the Department of Trade and Industry. While most of the company's personal lines customers have been adopted by Royal & SunAlliance, many of its corporate customers have been left unable to pay claims against them that were insured by Independent Insurance.
Howard Epstein of Class Law, which is in the advanced stages of preparing a potential class action on behalf of 2,000 creditors, said Mr Bright's bankruptcy had no effect on the bulk of its pending actions, which were still at the "feasibility stage". The Independent Insurance Shareholders' Action Group, which is pursuing claims exclusively on behalf of shareholders, declined to comment.
Mr Bright resigned as Independent Insurance's chief executive in April, and later quit as deputy chairman in June, shortly before PwC were called in.Reuse content