The ongoing battle for cash pledged to more than 6,500 former MG Rover workers at Longbridge in Birmingham reaches court next week – nearly seven years after the car maker collapsed.
A preliminary hearing next Tuesday will decide whether MG Rover parent group Phoenix Venture Holdings can pursue its legal fight against banking giant HBOS.
The case concerns £12 million pledged to car workers by Phoenix chairman John Towers following the closure of MG Rover, amid debts of more than £1 billion in April 2005.
The case will go before a High Court Registrar in the Chancery Division of the High Court when lawyers for Phoenix Venture Holdings will argue for the disclosure of financial information related to the assets of MG Rover, which passed between administrators PwC and bank HBOS in 2005.
Lawyers for all three parties are expected to attend the London hearing, which is key to the long-held hopes of cash payouts by more than 6,500 former MG Rover workers.
Just days after the collapse of MG Rover, then chairman John Towers said: “Phoenix Venture Holdings has significant assets totalling around £50 million, but we believe a reasonable estimate of its present value is between £10 million and £30 million.”
But the cash pledged was subsequently wiped out by HBOS’s withdrawal of funds.
A statement from Lloyds Banking Group issued in 2010 said: “As a major lender to MG Rover we have made losses from its collapse.
"We therefore have a duty to our shareholders, including the taxpayer, to try to minimise these losses. Along with other creditors, we are seeking to do this through the normal recoveries process.
“We are very mindful of the hardship that MG Rover workers suffered. We have made substantial donations to the West Midlands community and we are playing our part in supporting the region’s economic recovery.
“It is not in anyone’s gift, if indeed that is the intention, to promise to donate money to others that is not legally theirs. We will continue to try to recover money that rightfully belongs to the bank.”
