Business View: Phoenix Four must dig deeper into their own pockets

Named the Phoenix Trust, it was to be funded to the tune of £30m-£40m from the assets of the director's remaining business and their personal fortunes. The directors' press release, issued on 15 April, said they would "quickly realise" the money "to benefit the families and dependents of the Longbridge workforce".

It was difficult to criticise what seemed like a generous pledge, and it helped draw some of the anger in Longbridge over accusations that the directors had asset-stripped the last British-owned volume car maker.

The directors' promises will be put to the test on Wednesday when Mr Beale will meet the four trustees to discuss the creation of the Phoenix Trust. We will then find out whether the pledges made on 15 April were genuine - or hot air.

The signs aren't good.

The Phoenix Four have already refused to give up their assets - including Studley Castle in Warwickshire - while they are under investigation by Department of Trade and Industry-appointed officials. That could take over a year.

If they do finally sell, a question remains about the value of the assets. The Phoenix Four believe that they could be worth up to £40m, but some independent experts think £10m is more realistic.

But let's be optimistic and assume the Phoenix Four are right. Even then, the money that could be paid into the trust will be well below the £40m, because of various claims against their company, Phoenix Venture Holdings.

One of the largest is from the trustees of the MG Rover pension schemes. They want to enter the schemes into the Government's Pension Protection Fund. For this to happen, Phoenix Venture Holdings must first rid itself of pension liabilities linked to the MG Rover funds. It is now days from agreeing to pay just under £10m to do this.

On top of this, potential future claims against Phoenix Venture Holdings are found in the company's last published set of accounts. They show it owed at least £57m to various parties, although some of this could be to other companies owned by the directors.

Phoenix Venture Holdings is still the largest creditor to MG Rover, and optimists believe this could provide it with cash to pay into the trust. But they forget that Pricewaterhouse-Coopers, the administrator, has indicated that creditors will receive only a few pence in the pound; Phoenix Venture Holdings will be lucky to get a couple of million quid.

Despite this, the Phoenix Trust is still a goer, insists a spokesman for the four. To establish the trust, the Phoenix directors will pledge some of their own money to the fund, he says (although he concedes that, in the grand scheme of things, it won't be much).

What's more, money from the various fundraising initiatives that sprang up when MG Rover went bust could also be injected into the fund, spins the spokesman.

It sounds promising, except it doesn't amount to much. The Rover Community Fund did an admirable job rattling tins and raised £1,400. A Birmingham City benefit football match generated £50,000.

All this doesn't bode well for the Phoenix Four's bold promises about the trust. With so little money on offer, the trustees may argue on Wednesday that it is better not to set up the trust right now for fear of raising false hopes.

There is a way round this. The Phoenix Four could hand over to the Phoenix Trust a larger slug of their personal wealth generated from MG Rover. Unfortunately, says the Phoenix Four spokesman, this is not on the cards. And while this is the case, their reputation, like the future of MG Rover, will remain unsalvageable.

clayton.hirst@independent.co.uk