Payoff plan for laid-off workers runs into a roadblock at TVR

Russian owner's goodwill redundancy gesture may crash because other creditors must also be paid
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The Independent Online

The secretive Russian owner of beleaguered British sports car maker TVR has offered to pay the estimated £3m owed to the 260 workers who were made redundant last week.

But it is understood that the Blackpool-based staff may not receive a penny from Nikolai Smolensky because others associated with TVR - including former owner Peter Wheeler - are also owed money.

Under administration rules, one set of creditors - in this case the 260 workers - cannot be given "preferential treatment" over others who are owed money.

Just days after Christmas, Blackpool Automotive, responsible for the running of loss-making TVR's only factory, went into administration. Blackpool Automotive had been formed last summer in a restructuring, becoming TVR's production arm.

But weeks before it went into administration, it was sold to an unnamed third party. TVR, which is not in administration, is not liable for Blackpool Automotive's debts, which are thought to total over £5m. Mr Smolensky, who could not be contacted, made the verbal offer via his advisers to Blackpool Automotive's administrators, PKF (UK), as a gesture of goodwill. But talks between the two sides about making the payment are not understood to have gone any further. Workers are owed three months' back pay and another three months in redundancy payments.

One problem could be that the administrators would not be able to pay just the workers on Mr Smolensky's behalf. The administrators must pay creditors in order of their seniority.

Other Blackpool Automotive creditors include Mr Wheeler, who sold TVR to Mr Smolensky in 2004 for £15m. Mr Wheeler, who could not be reached for comment, still owns the Blackpool factory and the surrounding land and is owed rent. He is also understood to be claiming money to compensate for the dilapidation of the factory.

Andy Robertson, regional organiser for the T&G union, said: "We could work out a compromise agreement. But Mr Smolensky's representatives said they were having trouble with the administrators." PKF (UK) declined to comment.