Lovells set for groundbreaking work on Equitable Life plan

City firm Lovells is devising a groundbreaking plan to safeguard Equitable Life Assurance Society's policyholders.

This morning Equitable and Halifax Group announced that Halifax has agreed to acquire Equitable's operating assets, salesforce and non-profit and unit linked business for a payment of up to 1 billion into Equitable's with profits fund.

Equitable also announced the outline of a proposed scheme, under section 425 of the Companies Act 1985, to achieve a compromise between policyholders with guaranteed annuity rate policies and those with non-guaranteed annuity rate policies.

The Lovells team acting for Equitable is led by corporate insurance specialist, John Young.

Work on the groundbreaking proposed section 425 scheme is led by the head of Lovells' insurance restructuring team, Robin Spencer.

Upwards of 10 other partners and 20 other lawyers have been heavily engaged on the transaction.

International aspects were handled locally by A&L Goodbody (Ireland), Andersen Luther (Germany), Ozannes (Guernsey) and Key & Dixon (Dubai).

Halifax is represented by a team led by Andrew Peck of Linklaters & Alliance.

Lovells has been acting for Equitable since the end of July, when a team headed by John Young was appointed to advise on its proposed demutualisation and sale.

In July 2000, the House of Lords ruled that Equitable could not give a different level of final bonus to with-profits policyholders who had guaranteed annuity rates (GARs) in their policies.

As a result of the judgment, Equitable announced that it had decided that it was in the best interests of its members to commence a process to find a purchaser for the society.

On 8 December 2000, Equitable announced that no firm proposals had been received, and that the society would stop writing new business with immediate effect, but that the society would continue to explore the sale of some of its operations.

The first tangible result of these discussions was the announcement on in December 2000, that Equitable had entered into an agreement with Liverpool Victoria Friendly Society Limited to sell it Equitable's wholly-owned subsidiary, Permanent Insurance Company, for 150 million in cash.

Lovells acted on that transaction as well.

Neil Rose