Hugh Osmond, the Pizza Express entrepreneur who attempted a refinancing deal with compensation company The Accident Group, has described the company's £7.6m dividend payout last year as "madness".
Osmond said he had been considering restructuring TAG with the company's directors when he learnt of the payout.
The Daily Telegraph reported that Osmond decided last autumn to pull out of the deal to recreate TAG because it was clear to him that "insurance capacity would dry up ... but they didn't acknowledge it".
Creditors involved with the personal injury compensation company are owed up to £100m but are not expected to recover anything. The dividend comprised 42% of TAG's 2002 pre-tax profits.
