No end in sight for Maxwell fund talks

Optimism over a settlement between Maxwell pension fund representatives and institutions offering compensation has been overdone, participants in the talks warned yesterday, as Thursday's deadline for an agreement moved closer.

Less than £70m separates what the trustees representing 20,000 pensioners need to plug the "hole" created by Robert Maxwell, and the amount of compensation a series of international institutions holding disputed pension assets are prepared to offer.

One participant in the talks said yesterday: "Some of the optimism floating around at the moment is not necessarily justified. Its much more of a cliff-hanger than some people think."

In a separate development yesterday the trustees of the private company pension schemes within the Maxwell group agreed to receive £10.6m from the administrators of those companies in respect of disputed pension fund assets.

Clay & Partner Pension Trustees represent 4,500 pensioners, and still have other claims which form part of the global settlement talks and which are unaffected by yesterday's announcement.

The institutions in the larger global settlement negotiations, which include Goldman Sachs, Lehman Brothers and accountancy firm Coopers & Lybrand, have to give their final offer to Government-appointed arbiter Sir John Cuckney by Thursday.

Sir John is attempting to put together a global settlement of all Maxwell-related claims. If the talks fail then the trustees will be forced to launch costly legal action against the institutions which would take years to resolve.

As soon as he has received the final offers from the institutions Sir John will pass them on to the trustees of the pension funds, who need £300m to replace looted funds.

The trustees will have to make up their minds quickly. Their verdict could be delivered on Friday afternoon at the earliest, or Monday at the latest.

Sources close to the talks suggested that if the global settlement fails then a number of big bilateral agreements between trustees and institutions would follow, as well as an avalanche of litigation.

The mini-settlement announced yesterday between Clay & Partners and administrators Arthur Andersen will itself save an enormous amount of time, since it could have taken years to establish the legal status of the trustees' claim.

The trustees are therefore happy with the £10.6m despite their original claim being for £44.8m. There was no guarantee that they would have won this through the courts or how long the court battle would have taken. The trustees will use similar considerations if the global settlement falls through at the end of the week.

The settlement will provide £9.2m to the AGB Pension Scheme and AGB Research group Retirement Benefits Scheme, £0.9m to the Headington Pension and £0.5m to the Maxwell Media Pension Plan.

Alan Fishman, of Clay & Partners, said: "We are satisfied that this is an excellent settlement for both parties allowing, as it does, a significant improvement in the financial condition of the Schemes."