Pension trustee applies to be MCC creditor

Click to follow
The Independent Online
LAW Debenture Trust, the trustee of the Maxwell Communication Corporation pension plan, has put in a legal claim to be accepted as a creditor of MCC under its reorganisation plans.

The move, if successful, could realise as much as pounds 30m for the 5,000 members of the MCC pension schemes. At present they are relying on money lent to the schemes by the Department of Social Security to maintain full pensions to the 1,000 former MCC employees who have retired.

Romela Pocock of the plan's lawyers, Nabarro Nathanson, said that the claim was under the deeds and rules of the pension scheme. A further claim is likely under Section 58B of the Social Security Act, which was brought into force earlier this year and makes insolvent companies liable for shortfalls in their pension schemes.

Nabarro has been forced to go to the US courts for leave to sue MCC, as the group is in Chapter 11 bankruptcy protection in the US as well as in administration in the UK.

If the claim is accepted, the pensioners will rank as ordinary creditors and will receive whatever payout comes from the company. The estimated shortfall for MCC's pensioners is around pounds 70m, but creditors of MCC will be lucky to see more than 50p in the pound for claims.

A plan to realise the assets of the group, which are largely in two US companies, Macmillan and Official Airline Guides, is largely complete and is due to go to creditors before the end of this year.

The plan will involve the sale of OAG, with Reed International thought to be the most likely buyer, and the flotation of Macmillan in New York some time next year, depending on market conditions.

Clay & Partners, the trustee of the pension funds for Maxwell private companies, has put in claims under Section 58B. However Geoff Booth, a partner at Clay, said the legislation was poorly worded and may not help pensioners as much as had been hoped when it was brought into force.