Carole Nash Classic Insurance Specialists

Press Report : Wait for cash goes on for former Longbridge workers

Jon Griffin, Birmingham Post, 8th September, 2009

More than 6,000 ex-Longbridge workers face more months of waiting for four-figure payouts from the employee Trust Fund – despite the imminent release of the Government report into the collapse of MG Rover. With Government publication of the report into the demise of Longbridge due on Friday, workers were warned today by Phoenix Venture Holdings of further lengthy delays to payments.

In a letter to MG Rover Trust Fund member Carl Chinn, fellow member and PVH Non-Executive Director Nigel Petrie said: “I should make it clear that the completion and publication of the Department for Business, Innovation and Skills report cannot automatically trigger the disbursement of the Trust Fund.

The process from now onwards is to settle all remaining assets and the liabilities and the Directors are hopeful that, once the DBIS report, is published this process can be completed in a matter of months, even though the administration process of PVH’s insolvent companies is unlikely to be completed.” Nigel Petrie, Non-Executive Director, Phoenix Venture Holdings Limited

“The process from now onwards is to settle all remaining assets and the liabilities and the Directors are hopeful that, once the DBIS report, is published this process can be completed in a matter of months, even though the administration process of PVH’s insolvent companies is unlikely to be completed.

“Suggestions that disbursement can happen immediately fail to take into account the businesses processes involved in the liquidation of a solvent company. When this process is complete, the Directors will resign their positions and pass the company and its assets to an Insolvency Practitioner who will perform what is known as a ‘Members Voluntary Liquidation’ process. Cash generated from this process then passes to the Trust Fund for the trustees to distribute as they see fit.”

The prospect of further delays in the payouts was attacked by Professor Chinn, who has campaigned for distribution of the funds to the 6,000 plus ex-workers over the last four years. Professor Chinn said: “It is frustrating and upsetting that this has dragged on for so long and continues to do so. Every time it looks as if they may get some money, something arises. It is disturbing for all the workers. A lot of workers were under the impression that once the report was published, the money would be distributed.”

It is frustrating and upsetting that this has dragged on for so long and continues to do so. Every time it looks as if they may get some money, something arises. It is disturbing for all the workers. A lot of workers were under the impression that once the report was published, the money would be distributed.” Professor Carl Chinn, Trustee, MG Rover Trust Fund

The delay in the publication of the Government report has left up to £16 million pledged to former workers languishing in a bank account, frustrating hopes of payouts of four-figure sums. Money generated by the sale of former conference centre Studley Castle and dealerships has been lying untouched in a bank account for more than two years as a result.

However, Professor Chinn has warned for months that many ex-Longbridge workers still struggling in temporary low paid and insecure work needed payments as soon as possible. Mr Petrie said the Government report had “delayed progress significantly and taken a major toll on the process. At the time of writing it is not possible to quantify the amount the liquidation will be able to pass on to the trustees as there are still significant negotiations to conclude, but I am happy that every effort is being made to maximise the funds available.”

[Source: Birmingham Post]

Posted in: AROnline News, MG Rover

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