MPs attack Maxwell liquidators: Commons committee criticises fees of more than pounds 50m and urges legal action against banks

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The Independent Online
THE liquidators of the late Robert Maxwell's business empire were yesterday attacked by MPs for having charged fees which 'cannot be justified' of more than pounds 50m to date. The MPs warned that the final cost to creditors and pensioners could total more than pounds 100m.

The report by the Commons' social security committee, headed by Frank Field, also criticised the Maxwell insolvency practitioners for being slow in taking legal action against international banks that hold more than pounds 170m in disputed Maxwell pension fund assets.

The report details fees charged by the accountants Price Waterhouse of pounds 120 per hour and by their solicitors, Norton Rose, of pounds 191 per hour.

The committee said it would prepare a further report once criminal proceedings against the main Maxwell figures had been completed. This would deal with the role played in the affair by various banks and financial institutions that respectively managed, 'processed' and received pension fund assets.

The report said that this would include Goldman Sachs, which had been fined pounds 160,000 by the Securities and Futures Association in respect of deficiencies in its management control. 'Goldman Sachs, which, according to reports which we have seen, enthusiastically embraced Robert Maxwell as a source of substantial profit and fee income, was involved in, or advising on, a wide variety of Maxwell 'transactions' which ultimately resulted, directly or indirectly, in a substantial part of the loss that the pensioners suffered.'

Mr Field's committee demanded a complete review of insolvency law. The MPs recommended that in future pensioners should rank ahead of banks and other creditors when companies are wound up. They also called for an insolvency ombudsman to regulate liquidators' fees.

The MPs expressed concern that an impression had been fostered in the media that the problem of the missing Maxwell millions had largely been solved in recent months by the liquidators. In fact, said the MPs, 'some pounds 440m of assets are still outstanding'.

David Shaw, MP for Dover, told a press conference at the House of Commons that much of the money the liquidators had recovered so far had been gathered up in the first few months after their appointment in the autumn of 1991, following the collapse of the Maxwell business empire. He was concerned that they were still charging significant fees while making fewer recoveries and while they had launched no significant legal actions to recover disputed pension fund assets from banks.

The report was chiefly concerned with the central role of Neil Cooper of Robson Rhodes, the liquidator of the main Maxwell pensions vehicle, Bishopsgate Investment Management. Mr Cooper and his solicitors Stephenson Harwood have charged fees of pounds 6.1m so far.

Mr Cooper said yesterday that the Insolvency Act 1986 gave him strong investigative powers and that he would be acting 'irresponsibly' if he did not use these to the full before embarking on litigation. 'We do not believe that the pensioners' interests are best served by protracted litigation if this can be avoided.

'We are pleased to report there are now assets with a value of about pounds 300m secured for the pensioners and that substantial progress has been made in a number of other matters which should increase the funds available to the pensioners.'

The report said that the committee had 'particular misgivings about the work of Buchler Phillips as the receivers to the private (Maxwell) estate and about some of the information they have proved for the committee.' Mr Field said the committee would issue a separate report on the firm later in the year.

View from City Road, page 22

----------------------------------------------------------------- INSOLVENCY PRACTITIONERS: THE COSTS* ----------------------------------------------------------------- Accountants Solicitors Cost Robson Rhodes Stephenson Harwood pounds 6.1m Arthur Andersen Allen & Overy pounds 19.7m Price Waterhouse Norton Rose and others pounds 24.7m Buchler Phillips Nabarro Nathanson pounds 1.1m Total: pounds 51.6m * At 31 March 1993 -----------------------------------------------------------------

(Photograph omitted)

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