MPs condemn firms over Maxwell insolvency fees
The report by the Social Security Select Committee, chaired by Frank Field, will also make general criticisms about the way several other accountancy and legal firms have performed in sorting out the empire on behalf of Maxwell shareholders, creditors and pensioners. It estimates that they will cost more than pounds 100m in fees.
But the strongest attack is reserved for Buchler Phillips, which was hired by Mirror Group Newspapers to take charge of the personal estate of Robert Maxwell and see whether any money could be recovered for the pensioners. The report states that the committee 'has particular misgivings about the work of Buchler Phillips' and criticises the fees charged by the company.
According to the report, Buchler Phillips and its lawyers, Nabarro Nathanson, have submitted bills for pounds 1.1m. The accountancy firm would not confirm the figures, but said it has recovered pounds 6m for the pensioners. Some of this however has been claimed by other accountants placed in charge of other parts of the Maxwell empire.
Buchler Phillips may also face a second drubbing, with the committee threatening to call the accountants back to give evidence in front of the MPs. The committee will then produce a special report on the company's work in the autumn.
Among the other firms to be criticised will be Robson Rhodes, the accountants, and Stephenson Harwood, the lawyers. Both act as liquidators of the Maxwell pension funds and have been accused of dragging their feet because they have yet to start litigation against banks - including Lehman Brothers, Credit Suisse and Banque Nationale de Paris - holding Maxwell pension fund assets. They have also taken no action as yet against former advisers to Maxwell companies, such as Coopers & Lybrand and Goldman Sachs. The report notes that the investigations to identify where the money in the Maxwell empire has gone were completed last year, yet Robson Rhodes and Stephenson Harwood have yet to go to the courts for recovery of about pounds 180m held by the banks.
The report makes a broad criticism of the inefficiency of accountants looking after insolvencies, and questions whether the Government should look again at the issue of how to deal with insolvent companies. The current system has been in operation for only about five years, after a review by a committee led by Sir Kenneth Cork, one of the UK's most prominent insolvency practitioners.
It notes that by 31 March this year, pounds 51.6m of fees had been run up in the Maxwell insolvency. Of this pounds 6.1m had gone to Robson Rhodes, Stephenson Harwood and related advisers, pounds 19.7m to Arthur Andersen and the lawyers Allen and Overy, which are in charge of the Maxwell private companies, pounds 24.7m had gone to Price Waterhouse, Norton Rose and various US firms in charge of Maxwell Communication Corporation, as well as the pounds 1.1m billed to Buchler Phillips and Nabarro Nathanson. The report estimates that the total bill will exceed pounds 100m, which the committee attacks as excessive.
Insolvency, pages 14-16
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