Cantillon: Charleton unimpressed by Element Six
Judge criticises lack of ‘humanity’ in attitudes of executives
Mr Justice Peter Charleton was sharply critical of the way Element Six handled the pension crisis that struck the company in 2011. Photograph: Dara Mac Dónaill
Mr Justice Peter Charleton (pictured) was sharply critical of the way that industrial diamond manufacturer Element Six handled the pension crisis that struck the company in 2011 and led to the complex High Court case on which he delivered judgment on Tuesday.
More than 100 members of its defined benefit pension scheme sued the trustees for breach of duty after they agreed to a deal that involved shutting the fund and accepting €37.1 million from the company.
The scheme’s members lost their case. Even though it was not a direct party to proceedings, in his judgment, Justice Charleton made it clear that the he felt conduct of the company and two executives in negotiations left a lot to be desired.
The Shannon-based firm told the trustees that a failure to accept its offer and to resolve the crisis over the fund’s €129 million deficit could trigger its liquidation with the loss of 359 jobs.
The judge emphasised that there was no evidence that the company’s Luxembourg parent was to blame for this, but said that at local level, “the attitude adopted by the company in Shannon and by the two relevant male executives was one lacking any emotional intelligence and was completely geared towards monetary success at the expense of any humanity in approach”.
As the company had indemnified the trustees, it would have had to foot the bill had they lost, at a cost of tens of millions of euro, if not more. It was probably glad to get away with just criticism from the bench.
However, given that roughly half the Republic’s defined benefit pension schemes are in trouble, there are probably plenty of executives attempting to
play hardball with those who safeguard their employees’ retirement savings.
Let’s hope that they heed Justice Charleton’s comments.