Maxwell Empire Totters as Banks Grow Restive
LONDON -- Bankers feared a collapse of the Maxwell empire as talk circulated Wednesday of insolvency proceedings' being started even before a standstill agreement expires Friday.
Non-British lenders appeared likeliest to break the standstill agreed to at a Monday meeting, a banker said, as two Swiss banks said they might not wait until Friday. These creditors want to force the Maxwell entities into "administration," roughly the British equivalent of filing for bankruptcy protection.
Banks |Pressing Hard'
"Administration looks increasingly inevitable, although at the moment we are still looking at Friday," said a banker close to the talks. "But several of the foreign banks are already pressing hard for receivership."
Kevin Maxwell told bankers Monday that his family's private firms owned about $530 million to the Mirror Group Newspapers pension fund and a further $440 million to Maxwell Communication Corp., bankers said.
Mr. Maxwell, before he quit Tuesday as chairman of MCC, said a "white knight" was ready to bail out the private businesses, but he did not name the investor he said was discussing injecting up to $700 million into the family companies.
Investing for Edge on Assets
An adviser to the family said the only advantage for any investor in the privately held businesses would be in beating potential competition for assets by grabbing control of Maxwell Communication and the Mirror Group through a stake in the private businesses.
"If somebody wanted to buy control of Mirror Group Newspapers and Maxwell Communication by injecting money into the private side, it could be a way of avoiding competition for the [other] assets," the source said.
Bankers and brokers said it was increasingly unlikely the Maxwells could hang on to their majority stakes in the public companies.