Press Report : Mystery £23m claim on Longbridge Phoenix cash

Jon Griffin, Birmingham Post, 31st August, 2010

More than £23 million raised from the remnants of the collapsed Longbridge Phoenix empire could lie untouched for years – because of a mystery Government claim.

Insolvency experts appointed to handle the liquidation of MGR Capital Limited – MG Rover’s finance and lease loan book – have now warned that the distribution of cash could be held up indefinitely.

They say the Pensions Regulator has thrown a spanner in the works of any payouts by giving notice to the company’s Liquidator, Paul Stanley, of a potential £21 million claim on the cash.

The notice from the quango means that MGR Capital joint shareholders the Phoenix Four and banking giant HBOS cannot be allocated the funds until the Pensions Regulator’s claim is rejected or approved.
It is understood that, after Capital Gains Tax has been paid, the Phoenix Directors could be eligible for around £8 million and would then be certain to face huge pressure to hand over the sum to ex-workers.

More than 6,000 former Longbridge workers have already been left frustrated after HBOS claimed a £12 million-plus sum from the proceeds of Phoenix Venture Holdings assets, which had been pledged to an employee trust fund as long ago as April 2005.

However, the Liquidator, Paul Stanley of Begbies Traynor, said the Pensions Regulator had left distribution of the £23,232,000 proceeds from MGR Capital in limbo. ‘The timescale is in the hands of the Pensions Regulator. They have advised that they may have a claim, although I am struggling with the concept. I cannot reject the claim until I know what the claim is. Because they have not put a claim in, I cannot reject it.”

Mr Stanley said he had met with Phoenix Directors over the issue. ‘I have met them all at different points. They have not divulged to me what they are going to do with the money if they get it.”

The Pensions Regulator, set up by the Government in 2004 to oversee work-based Pension Schemes, has refused to discuss the potential claim.

[Source: Birmingham Post]

Clive Goldthorp

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