Maxwell allowance cut off by court

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The Independent Online
KEVIN MAXWELL, who earlier this week was ordered to pay nearly pounds 407m to the liquidators of the Maxwell pension funds, has had his pounds 1,500 a week living allowance stopped by the courts.

In addition, Stephenson Harwood, the lawyers acting for Robson Rhodes, the liquidators of Bishopsgate Investment Management, have started legal moves to have him declared bankrupt and hope to have this done within the next few days, so speeding up the normal legal process.

Mr Maxwell was granted the living allowance when his assets were frozen by the courts in December after it was discovered that more than pounds 400m was missing from the pension funds of Maxwell companies. However, it was stopped after the summary judgment on Monday that he was liable for the missing money.

Since Mr Maxwell's assets were frozen, it has emerged that his mother, Elizabeth Maxwell, was paying his legal expenses and those of his brother, Ian. Stephenson Harwood are understood to have presented Mr Maxwell with a statutory demand for the pounds 406.5m. In normal circumstances he would have 21 days to reply to the demand before the lawyers petition the court to declare him bankrupt.

However, earlier this month Mr Maxwell was given time to come to a statutory arrangement with his creditors after he told the courts that he could not meet an income tax demand. That time expired on Wednesday, and Mr Maxwell could not come to a deal as Robson Rhodes said it would vote down any arrangement, being the largest creditor.

As Mr Maxwell has effectively said he cannot meet his debts, the liquidators will go to the court and say that a bankruptcy order should be made immediately.

The liquidators were also in court yesterday trying to obtain an order that Ian Maxwell should also be liable for the missing pounds 406.5m.

The hearing before Mr Justice Chadwick was in private and is expected to last two or three days.

Unlike Kevin Maxwell, who did not put in a defence to the liquidators' application for summary judgment, his brother was in court and represented by lawyers and vigorously opposed any order being made against him.

Both brothers are on bail after being charged with various counts of conspiracy to defraud.

The High Court is expected to rule on Tuesday as to whether Barclays Bank has to pay dollars 30m ( pounds 15.7m) to Price Waterhouse, the adminstrators of Maxwell Communication Corporation. Price Waterhouse claims Barclays received the money as a preferential creditor before MCC collapsed.

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