Kevin Maxwell bankruptcy case is delayed

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The Independent Online
KEVIN MAXWELL, the son of the disgraced newspaper baron Robert Maxwell, has escaped personal bankruptcy for at least another couple of days after a three- hour private hearing at the High Court broke up without a decision yesterday afternoon.

The hearing of the bankruptcy petition will not resume until tomorrow at the earliest. Mr Maxwell's bankruptcy is sought by Robson Rhodes, the accountancy firm that is liquidator of Bishopsgate Investment Management. The Maxwell firm managed hundreds of millions of pounds of missing pension fund money.

Mr Maxwell, wearing a light beard and apparently relaxed, said nothing about the afternoon's discussions before departing in a taxi. His solicitor, Keith Oliver, a partner in the firm of Peters & Peters, said: 'Given the private nature of the hearing and the fact that the hearing continues, it would be inappropriate at this stage to say anything.'

It is believed that much of yesterday's legal argument before Mr Registrar Scott centred on an important technicality.

Mr Maxwell is not contesting the summary judgment made against him in July, which ordered him to pay pounds 406.5m in damages for the benefit of the Maxwell pensioners.

If Robson Rhodes' petition is successful, Mr Maxwell will become Britain's biggest bankrupt, supplanting the record of William Stern, the property millionaire made bankrupt for pounds 118m in 1974.

As a bankrupt, he will be unable to work as a company director and will face restrictions on obtaining credit and other financial difficulties.

Mr Maxwell, 33, offered no defence at the July hearing, which found him to be in breach of his fiduciary duties as a director of Bishopsgate.

Ian Maxwell, Kevin's elder brother, is fighting Robson Rhodes' application for a similar summary judgment against him. A ruling in his case is to be given later this month.

If he fails in his objections to an immediate judgment, he too is expected to face bankruptcy proceedings.

The liquidators have argued that the appointment of a trustee in bankruptcy will enable a thorough assessment of Mr Maxwell's assets to be conducted. These would then be available for distribution among his creditors, of which Bishopsgate is likely to be by far the largest.

In particular, it is hoped that the trustee might be able to seek funds for creditors from the secretive Maxwell trusts in Liechtenstein.

Partners from BDO Binder Hamlyn, another accountancy firm, have been lined up as the prospective trustee in bankruptcy.

Kevin Maxwell has said that the liquidators' move for an expedited bankruptcy hearing - apparently based on fears that assets would be dissipated - was 'utterly misconceived'.

After an earlier hearing was adjourned last month Mr Maxwell said: 'No assets have been dissipated or will be dissipated. I have and will always conduct myself in compliance with court orders and for the benefit of all my creditors.'

Mr Maxwell has already indicated he is insolvent, having declared himself unable to meet an Inland Revenue tax demand. In an affidavit sworn after the death of his father last year, Mr Maxwell put his assets at pounds 1.6m and debts at pounds 1.75m. It emerged yesterday that he has sold his house in Chelsea, London, for an unknown price.

The four-storey neo-Georgian property was once valued at pounds 1.7m. Mr Maxwell only moved out a few months ago.

One local estate agent in the area said he thought the house was sold 'about two months ago'.

Mr Maxwell and his brother Ian, 36, did not appear at City of London Magistrates' Court yesterday on charges of theft and conspiracy to defraud involving more than pounds 135m. The brothers and their co-defendant, Larry Trachtenberg, were remanded on bail for a further three months.