PwC pays record pounds 68m in Maxwell settlement

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The Independent Online
BRITAIN'S BIGGEST firm of accountants agreed yesterday to pay a record pounds 67.6m to settle a professional negligence claim brought by the American side of the late Robert Maxwell's business empire.

Coopers & Lybrand, now part of PricewaterhouseCoopers (PwC), said the settlement with Maxwell Communication Corporation (MCC) includes "no admission of liability".

The firm said: "This removes the last piece of Maxwell litigation from Coopers & Lybrand. We have sought to achieve an equitable settlement that avoids the costs and uncertainties of a long trial."

The case was set to go to court in October 2000, and the trial and appeal process could have lasted up to 18 months.

PwC was fined around pounds 3.5m earlier this year by an accountancy regulator for its audit of the private companies owned by Mr Maxwell. Four individual Coopers partners were also reprimanded in this earlier action by the Joint Disciplinary Scheme (JDS), the accountancy watchdog.

Coopers were auditors to all of Robert Maxwell's companies, more than 400 worldwide, by the time the tycoon drowned, in 1991. The American side, MCC, had debts of over $3bn, owed mostly to banks. Yesterday's settlement means creditors can expect 58 per cent of that back.

Accountants from Price Waterhouse were appointed as administrators to MCC in December1991, and lodged a claim of around pounds 300m against Coopers for negligence in its audit of the group. The situation was complicated 18 months ago when Coopers merged with Price Waterhouse. To avoid a conflict of interest, separate administrators from Grant Thornton were brought in to handle the claim against Coopers.

Privately, sources at PwC said yesterday they were pleased at the scale of the settlement. Taking into account the costs of the eight-year administration of pounds 31m, the settlement represented just a tenth of the original claim against Coopers.

Separately, inspectors from the DTI are preparing their questions before interviewing Kevin Maxwell, the son of Robert Maxwell, about his role in the flotation of Mirror Group. The report by Sir John Thomas QC and Raymond Turner has been held up by the previous criminal trial involving Mr Maxwell. The DTI could give no date for the report's eventual publication.