Two former directors of Desmonds and Sons Limited have been ordered to pay £1m into the former clothing firm’s pension fund.
A regulatory determination panel held that Denis Desmond and Donal Gordon should contribute to a shortfall in the scheme in excess of £10m.
The Court of Appeal in Belfast is also due to hear a fresh attempt to force another shareholder Annick Desmond into making a payment. Details of the decision have only been made public following the lifting of a confidentiality clause surrounding the payment. It has now been conceded that no further justification can be given for holding the proceedings in private.
Desmonds and Sons - which employed 1,200 staff in Derry city and county and a further 250 in Dungiven - went into liquidation in 2004 and workers learned there was a shortfall of in excess of £10m in the pension fund.
The liquidation was completed in April 2005, shortly before a new Pensions Act came into place offeringcmore protection for workers and an employers’ fund. The shortfall meant pensions were almost halved. In December 2008, more than 350 former Desmond’s clothing workers won a three-year battle to have their pensions provided for under the Act ensuring they would receive 90% of their entitlements under the Financial Assistance Scheme.
In February 2010, the Pensions Regulator commenced regulatory proceedings against Mr and Mrs Desmond and Mr Gordon.
There is no suggestion of any wrong doing but the regulator sought an order for the three shareholders to make a contribution of £10.9m to the scheme.
A determination panel decided on a combined £1m to be paid by Messrs. Desmond and Gordon but no determination was made with regard to Mrs Desmond.