US court backs banks in dollars 140m Maxwell case

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The Independent Online
THREE banks have won a dollars 140m ( pounds 72.5m) court battle in the US against the administrator of the late Robert Maxwell's American publishing arm, Maxwell Communication Corporation, writes John Willcock.

The administrator, Price Waterhouse, which is winding up MCC, yesterday lost its case in the Bankruptcy Court of the Southern District of New York.

Price Waterhouse tried to assert that payments by MCC of more than dollars 140m to Barclays Bank, National Westminster Bank and Societe Generale before MCC's collapse could be recovered from the banks under American laws. The banks maintained that US law should not be applied to the payments in question and the Bankruptcy Court upheld this view.

Price Waterhouse has not yet decided whether to appeal.

A spokeswoman for National Westminster said: 'Naturally we are pleased at the outcome and we have always held the view that this action in the US courts was inappropriate.'

Barclays commented: 'The judgment has important ramifications for international insolvency procedures and we are pleased with the court's decision.'

MCC went into administration in December 1991. Since then Price Waterhouse has accepted creditors' claims against MCC totalling more than dollars 3bn as bona fide. A further dollars 1bn remains under consideration. The administrator plans to make a payout of 33p-43p in the pound to creditors. The timing of this payout depends on outstanding legal action by the liquidators of the Maxwell pension funds against Price Waterhouse. The pension funds lost more than pounds 440m, and a court hearing into their claims to the funds held by MCC's administrators will held in London in October.