MCC pensioners ask for status rise

Click to follow
The Independent Online
THE CONSORTIUM of nearly 40 banks which lent pounds 1.5bn to Maxwell Communication Corporation is to meet to discuss a request by the group's pensioners to accept the MCC pension fund as a preferential creditor of the company.

The move, if accepted by the banks, could lead to as much as pounds 60m being diverted from the banks to helping restore the pounds 400m taken from the pension funds by Robert Maxwell.

The pensioners have already started legal action to be accepted as creditors, citing the trust deed of the fund as evidence for their legal position. In addition there may be a case under Article 58B of the Social Security Act, which says that pensioners rank as creditors of insolvent companies.

Law Debenture Trust, the trustee of the Maxwell Communication Pension Plan, has written to each of the banks asking whether they will accept the pensioners' position as creditors without having to go to the courts, so saving on expensive legal action.

Law Debenture is also asking for some preference to be given to the fund, so it would be paid out ahead of the banks.

Credit Lyonnais, the French bank leading the consortium, has called a meeting of all the banks to discuss the letter. However a senior banker said last night that the response of the bankers may depend on the legal advice they receive, which may be not to wait for a court decision in order not to set a legal precedent.

The letter will put the UK banks in the consortium, notably Barclays and Lloyds, under some pressure to help the pensioners. Earlier this year, National Westminster Bank agreed to give back to the pension funds around pounds 30m of shares in an Isreali pharmaceutical company that it was holding as collateral for bad loans.

Mirror Group Newspapers has struck a deal that should enable it to sell its 49 per cent holding in Donohue, a Canadian paper group, without further losses.

The group has written down the value of the stake to pounds 38.5m, about half what it was said to be worth when MGN was floated in April last year. The deal involves swapping a direct shareholding in an intermediate company for shares in Donohue, which MGN will then be free to sell.