Bank of America Settles with Mirror Newspaper Pension Trustees

Strategic Insights -

The Bank of America has paid a significant amount to the Mirror newspaper pension trustees as part of a settlement related to its involvement with the late Robert Maxwell. This announcement is seen as a boost to efforts to settle similar cases out of court, preserving funds for pensioners. Meanwhile, the Institute of Chartered Accountants has cleared Coopers & Lybrand of any wrongdoing in its audit of Maxwell-related companies.

Key Takeaways:

  • The Bank of America has paid £25 million to the Mirror newspaper pension trustees as part of a settlement.
  • The payment was made without admitting any legal liability, with the bank stating it was a way of putting its relatively minor involvement with Maxwell behind it.
  • Coopers & Lybrand has been cleared by the Institute of Chartered Accountants of any inadequacies in its procedures or controls related to the Maxwell case.
  • The disciplinary inquiry into Coopers and other Maxwell auditors will continue, led by Michael Chance, formerly of the Serious Fraud Office.
  • Liquidators and trustees of various funds have slapped writs on banks, including Goldman Sachs, Credit Suisse, Lehman Brothers, and Capel-Cure Myers, alleging that they should have known Maxwell had no right to pledge pension assets as collateral for loans.
  • Many defendants are preparing defenses stating they accepted collateral from Maxwell in good faith and should not have to return the assets.

Statistics:

  • £25 million: the amount paid by Bank of America to the Mirror newspaper pension trustees as part of the settlement.
  • £38 million: the total amount of actions launched by the Mirror Group pension scheme against Bank of America and Credit Suisse.
  • £91 million: the amount of money kept by three international banks that sold shares pledged to them by Maxwell, as allowed by High Court judge Mr Justice Millett.
  • £400 million: the approximate amount of pension funds misappropriated from pension funds by the late publisher Robert Maxwell.
  • 40p in the pound: the potential additional amount that creditors of crashed British & Commonwealth may receive on top of the 21p already predicted by the administrators.

Sources:

  • The Bank of America settlement (Source: unknown newspaper)
  • Coopers & Lybrand cleared of wrongdoing (Source: Institute of Chartered Accountants)
  • Liquidators and trustees slap writs on banks (Source: unknown newspaper)
  • High Court judge's ruling (Source: Times of London)
  • Potential additional amount for creditors of crashed British & Commonwealth (Source: unknown newspaper)