Equitable Life forced to sell the family silver as series of legal battles looms

Equitable Life, the troubled mutual insurer, is to raise at least £2.5m from a sale of its family heirlooms over the next nine months, as it puts its 200-year-old collection of antiques and paintings up for sale.

Included among the disposals is a Thomas Gainsborough painting of one of the society's founders, the Right Honourable Charles Morgan, who was president of the insurer between 1773 and 1806. The painting, which dates back to 1783, is on loan to the Gainsborough museum in Sudbury, but will be auctioned by Christie's when the loan comes to an end in June.

While the painting is to be auctioned with a guide price of £1m - the most valuable item in the Equitable collection - it is thought that it could fetch much more.

The group's other items, which include silverware and gold ornaments donated to the society by former investors and company presidents, will be auctioned off as soon as next month.

The more expensive items, including a gold cup worth at least £300,000, will be auctioned through Christie's, with the lower-value items auctioned via Rosebery's. These include portraits of more recent presidents, which are expected to fetch as little as £100 each.

The collection includes more than 300 items in total, and is expected to generate a minimum of £2.5m, and potentially much more.

The sale of the company's oldest possessions was sparked by a move from its Basinghall Street offices to the new Paternoster Square complex near St Paul's Cathedral.

The proceeds of the sale will go into Equitable's with-profits fund, and will provide a timely top-up to company resources ahead of a string of legal battles which the society faces over the coming year.

Next April, the insurer will clash with its former auditors, Ernst & Young, in the High Court, while around the same time, the group will also sue its former directors mismanagement of the group.

Equitable closed to new business almost four years ago after it became apparent it could not meet the guarantees it was forced to honour for its annuity clients.

A spokesman for the company said yesterday that the decision had been taken to sell the items after it realised its move to smaller premises would force it to store them - a move which itself would be costly. Instead, he said, the company decided it would be easier to sell the assets.