Michael Bright's pension fund is valued at £3m and will be protected from his creditors, his lawyer has told Insurance Times.
Trevor Sears, a partner at legal firm Davenport Lyons, said rumours that his pension was worth £11m were false. “His pension is only worth around £3m, because most of it was invested in Independent shares. As you are aware, the price of these shares is far lower in value today.”
The ex-Independent Insurance chief filed a petition with the courts, declaring himself bankrupt on August 7.
According to the company's annual reports for 1999 and 2000, Bright's pension contributions for those two years reached a total of £1.2m. In 1999, £552,000 was paid into his pension fund, while in 2000 it rose to £597,000.
Sears said: “The details of his pension fund are now with the official receivers. I can confirm his pension fund is not available to creditors.”
Since the Robert Maxwell pension scandal during the early 1990s, legislation has changed so occupational pensions are now protected if an individual goes bankrupt and are governed by independent trustees.
However, legislation has only recently changed for private pensions. Under the Welfare and Reform Pensions Act 2001, if Bright holds a private pension, his creditors can ask the courts to investigate whether a substantial amount of money had been placed in the fund before he declared himself bankrupt. If an individual puts a substantial amount in the pension fund and then declares themself bankrupt, the new Act regards this as a personal asset and not protected from creditors.
A spokeswoman for the Department of Work and Pensions said: “The law was changed to help protect pensions from creditors, but an extra provision was added. A judge can decide whether a large part of the person's assets were siphoned into the fund to stop creditors being paid. If so, the judge can rule that these funds belong to the creditors.”
Sears confirmed that Bright has put both his Kent and London homes on the market. The Smarden property is worth £1.5m, while his Wapping flat is valued at roughly £1m.
“The Spanish property is not yet on the market, but this is being reviewed by the receiver,” said Sears.
The Department of Trade and Industry (DTI) said at least two creditors had won court judgments against Bright, whose debts are believed to run into millions of pounds.
Sears said Bright would not be talking to the press as his wife was “very poorly” and he was preparing for his daughter's wedding.
