Lehman had issued a default notice

The Maxwell Trial; Day 63
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Lehman Brothers, the investment bank that was pressuring the Maxwell empire to reduce the millions of pounds it owed, had a "difficult" meeting with Kevin Maxwell one day after his tycoon father had been found dead, the Old Bailey fraud trial heard yesterday.

Phillip Howard, then head of the fixed income division of the bank, said on 6 November 1991 Lehmans had issued a default notice, a move that was "pretty serious" because had it became known it would have affected the Maxwell position with other bankers, the court was told.

When he and other Lehman executives arrived at Maxwell House they were kept waiting for an hour before being shown up to Kevin's office.

Asked how the meeting was difficult in other ways, Mr Howard said: "It was the day after Robert Maxwell had fallen off his boat so I imagine there was a lot of concern both of a personal nature and other bankers wanting to know what was going on. So I gathered that Kevin was very stressed and unhappy."

Kevin also made it clear to Lehman that he felt as a result of the action it had taken it was holding surplus collateral. Two of the securities held were Teva and Scitex shares, which were owned by Bishopsgate Investment Management, the pension fund arm of the Maxwell group.

By 25 November 1991, Lehman was insisting that every `t' was crossed and every `i' dotted in an agreement between the two organisations, agreed Mr Howard. He said he felt one reason was that Lehman wanted to get the Teva shares registered in New York so they could be traded on the stock exchange there.

The jury also heard of Robert Maxwell's insistence on dealing only with the top men in any organisation. Mr Howard said that a few days before Maxwell's death he telephoned the Pierre Hotel in New York, where the tycoon was staying.

A problem over signatures on financial documents had arisen in London and Mr Howard had been told Maxwell was causing the problem.

It soon became obvious on the telephone that what really "annoyed" Maxwell was that he had been expecting somebody more senior than Mr Howard to ring him about the matter.The problem was sorted out, and the signatures were given.

Kevin, his brother Ian, and ex-Maxwell aide Larry Trachtenberg all plead not guilty to conspiracy to defraud in respect of misuse of the pension fund investments.

The trial continues today.