Cash to Maxwell victims stopped

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The Independent Online
PENSIONERS who suffered because of the fraud by Robert Maxwell will this week be told that the pounds 2.5m 'lent' to their pension funds last summer at the behest of Peter Lilley, Secretary of State for Social Security, has run out.

Mr Lilley has told the pensioners that the Government will not provide any more money. The trustees of the schemes are to inform them by letter that their payments will be maintained for the meantime by dipping into the pounds 6m fund raised by Sir John Cuckney, the chairman of Royal Insurance, to help the pensioners out.

Sir John is expected to launch a new initiative to raise further money for the fund, which has suffered from the feeling in the City that a contribution to it is an admission of guilt. Payments from City firms have all but dried up.

In fact, banks which lent more than pounds 1.5bn to Maxwell Communication Corporation have blocked a possible payment of up to pounds 60m from the company to the Maxwell Corporation Pension Fund. The claim was lodged in October and Law Debenture Trust, the scheme trustee, had hoped it would be settled without having to go to court. However, it has been told by Credit Lyonnais, the lead bank, that because a number of banks have sold their debts to new investors, the case will have to go to court - which could take at least two years to settle.

The last of Mr Lilley's pounds 2.5m loan is being used up to cover this month's payments to members of the Maxwell Communication Pension Plan and the plans of some Maxwell private companies. These have been hit by a dispute over the amount of money owing to them from the Common Investment Fund, the central fund used by Robert Maxwell to manage all the pensions and from which he stole pounds 450m.

A number of the schemes have no other assets than those in the Common Fund. All the trustees agreed that the depleted funds, including the Maxwell Communication scheme, could draw money from the central fund. This was used to pay the December pensions.

However, the trustees of the Mirror Group Newspapers scheme, the largest beneficiary and owner of around half the Common Fund, have called a halt to the drawings until it can be determined who owns what. The trustees, headed by Charles Wilson, MGN's managing director, have said it is their duty to ensure the correct allocation of funds.

Colin Cornwell, one of the trustees, said they have not been able to gain enough information from Robson Rhodes, the liquidators of the Common Fund, to determine how it should be allocated.

Apparently, there are 11 different ways of dividing up the cake, and depending on how it is calculated, MGN's share could be as low as 35 per cent or as high as nearly 60 per cent.

(Photograph omitted)

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