Hopes for Maxwell settlement fade

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The Independent Online
Hopes for a global settlement for all claims relating to the Robert Maxwell fraud scandal are fading fast, threatening 20,000 pensioners with years more uncertainty and unleashing hundreds of millions of pounds' worth of litigation Concern is rising as the third anniversary of the tycoon's death on 5 November approaches. More than pounds 440m was looted from the pension funds, and government money donated two years ago to make up any shortfall for pensioners will run out in 18 months.

Failure to reach a global settlement would affect firms such as Coopers & Lybrand, which audited all Robert Maxwell's 800-odd companies. Pension fund liquidators plan to sue Coopers for hundreds of millions of pounds if the talks fail.

Goldman Sachs and Lehman Brothers also face big Maxwell-related claims.

The Maxwell Pensioners Trust, set up to aid pensioners two years ago, said yesterday that talks to establish whether a global settlement was possible were now nearing their conclusion, 18 months after their launch.

'The final result must rest solely with the parties involved,' the trust said yesterday. Sources close to the talks said this showed the Government was trying to distance itself from the likely collapse of the talks, which were originally supposed to have been completed by the end of this month.

Ken Trench, chairman of the Maxwell Pensioners Action Group, said yesterday: 'If the global settlement fails it will mean that 20,000 pensioners have suffered 18 months of mental turmoil because the Government failed to take appropriate action when the self- regulatory system it set up to control pensions investment in the City failed abysmally.'

Mr Trench said that pensioners would be forced to spend what little money they had pursuing costly and lengthy litigation against the City institutions that still held disputed Maxwell pensions assets.

The Government-funded Maxwell Pensions Trust agreed to make sure all Maxwell pensions were paid in full until mid-1996.

Sources close to the Government suggest that if the global settlement cannot be achieved the impact on pensioners will not be disastrous, since out-of- court settlements should fund pensions for another two years.

By that time further litigation by liquidators of the Maxwell pension companies should be bearing fruit, it was suggested.

Sources close to the talks said that the Mirror Group pension trustees, who represent the biggest section of the Maxwell pensioners, had been an obstacle in the talks because they thought they might get more from litigation than from an out-of- court settlement.

MGN Pension Trustees refused to discuss the talks, but issued a response to the trust's statement stressing that they did not know what, if any, progress on a settlement had been reached.

They said: 'It is only when we know who has made pledges, what conditions attach to them, how much has been collected, what our share will be, etc, that we can begin to consider whether or not any offer represents acceptable compensation for the misappropriations suffered by our pension scheme.

'We cannot predict how long this will take or whether further negotiations will then be necessary. It is therefore impossible to say what the outcome of the global settlement initiative is likely to be or when a conclusion is likely to be reached.'

Some sources suggested that financial institutions that held out against a global settlement in the hope that the issue would go away were misguided.

The tycoon's widow, Betty Maxwell, is about to publish her autobiography, and another book and television programme on the subject are due soon from the journalist Tom Bower.

Mirror Group pensioners received pounds 32m in an out-of- court settlement in February from Invesco Asset Management, Capel-Cure Myers and Lehman Brothers. Since then, Invesco's share price has recovered from a low in the aftermath of the pensions scandal.

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