City agrees to £276m Maxwell compensation

Coopers & Lybrand, Goldman Sachs and Lehman Brothers are among City institutions that yesterday agreed to pay £276m in compensation to the pension funds looted by the late Robert Maxwell. The settlement means that pensioners will not have to embark on years of expensive court action to recover more than £440m stolen from the pension funds by the late tycoon.

Mirror Group said last night that the settlement could release more than £100m in provisions that the newspaper group had made for lost pension funds.

In return for the £276m, the trustees of the pension funds will drop all legal claims against the institutions. The Government has also tacitly accepted that some of the £115m it is owed by the pension schemes, representing State Scheme Premiums, will never be repaid. MGN will have to pay out the £70m-odd sum it owes for SSPs over a long period, whereas the other pension funds will be treated more leniently, since the companies they served are insolvent.

The £276m sum also includes significant payments by the administrators of Maxwell Communication Corporation (MCC) and admininistrators of the Maxwell private companies. Together they held over £200m in disputed pension fund assets pledged by Maxwell against loans to his business empire.

The settlement means that the MCC adminstrators could double the amount they pay out to their own creditors.

The settlement took 18 months of tortuous negotiations by two government- appointed arbiters, former judge Sir Peter Webster and more recently Sir John Cuckney. When the £440m black hole was discovered in the pension funds the Government commissioned Sir Peter to broker a "global settlement" of all Maxwell-related claims. This was watered down last year to become a "major settlement". Several institutions did not take part in the talks, notably Crdit Suisse and Banque Nationale de Paris.

Liquidators of the main Maxwell pension fund, Bishopsgate Investment Management, and trustees of the Mirror scheme are both suing Crdit Suisse for a total of over £80m, and the trial of the case has already lasted over 70 days. A judgment may not emerge before 1996 or even 1997. Liquidators are also suing BNP for £33m in a hearing that started in Paris yesterday.

Tony Boram, chairman of the the 12,000-strong Association of Mirror Pensioners, said: "I am much relieved - in particular for those people who have been in such dire straits for so many years. We are confident that all our members will receive a pension. The fund was in danger of running out in 18 months. It was being kept afloat by donations from business and charity.

"Now pensioners know they will receive a guaranteed income, however paltry."

Mr Boram, a former print worker said: "Some have been at the end of their tether, facing losing their homes, everything they had ever worked so long and so hard for.Some did not even realise they were working for Maxwell. He bought and sold on the companies, after ripping them off."

He added: "Now they can have some confidence in the future. Things are not so terrible. They have an income they can at least survive on."

The pressure group began legal action against the tycoon almost a year before his death when they realised he was not making mandatory contributions to pension fund.

Mr Boram explained: "We started legal action back in 1991 when we realised he had stopped making contributions and was not even paying the administration costs on the pension fund. More investigation showed the fund was invested in companies which interested Maxwell and not blue-chip firms. It's been a long, hard battle. We are all just very relieved Mirror Group pensioners will be getting what they put in for."

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links