Court go-ahead for MCC sale: Maxwell creditors could see first cash by November

THE administrators of Maxwell Communication Corporation yesterday won vital court approval for a phased sell-off of the company's assets which clears the way for payments of hundreds of millions of pounds to Maxwell creditors.

Price Waterhouse said in a statement yesterday that the UK court had sanctioned a UK scheme of arrangement and a US Chapter 11 Reorganisation Plan. The ruling cleared the last hurdle facing a groundbreaking link-up between the UK and US bankruptcy systems which will allow the assets to be sold off and proceeds distributed to creditors worldwide.

The first sale of MCC assets in the US will be announced today by the administrators, Price Waterhouse.

MCC's biggest asset by far is the US publishing house Macmillan, which is expected to raise up to dollars 1bn. The bidding will start in the late summer and creditors can expect their first payout in November.

MCC pensioners face a shortfall of pounds 56m, and although yesterday's ruling increases their chances of getting their pensions, the company's creditor banks have strong claims.

Mark Homan, joint adminsitrator at PW, said last night that the ruling was 'a great relief. We will start mailing letters of claim to creditors next week. We are already talking to a number of creditors over their claims. It will be a couple of months before the bidding process for the US assets reaches its climax.'

The administrators agreed to sell one MCC asset, Offical Airline Guide, last month for dollars 4.25m to Reed Elsevier. The deal was subject to scrutiny by anti-trust legislators and the buyers are now carrying out due diligence on the company.

Yesterday's court ruling follows confirmation of the plan last week by the US courts.