Bank of America has agreed to pay London's Mirror Group Pension Scheme œ25 million (about $37 million) to settle claims relating to the bank's role as custodian for certain assets of the Mirror fund.
The deal represents the second asset recovery for the Mirror Group fund, which last summer received œ25 million from the œ59 million recovered from the sale of Teva Pharmaceutical shares - stock that was held in a pooled fund for various Maxwell pension plans.
Mirror Group trustees also are seeking approximately œ20 million, including interest, from Credit Suisse, which trustees say had received pension assets from Bank of America as security for loans to private Robert Maxwell companies.
These and other lawsuits came in the wake of financial irregularities that were discovered after the mysterious November 1991 death of tycoon Robert Maxwell. He is suspected of siphoning off millions in pension assets to shore up his crumbling financial empire.
Bank of America admitted no improprieties or legal responsibility for losses incurred by the Mirror Group scheme, and trustees' legal actions against it have been concluded. But because Credit Suisse in London "decided not to be a party" to the Bank of America settlement, its trial in the matter is still set for October.
In a statement, Credit Suisse officials also denied any wrongdoing. The statement said the company "has consistently maintained that it is under no liability to the trustees or any other party and that the security it took for its loan to Robert Maxwell Group PLC is valid and was taken without knowledge or any impropriety."
Meanwhile, the trial against three other financial institutions, concerning other losses suffered by the Mirror scheme, is set for Jan. 25. Defendants are three London-based firms: INVESCO MIM, Lehman Brothers International and Capel-Cure Myers Capital Management.
Mirror trustees are seeking a total of œ200 million from them, including œ50 million alleged to have been transferred to private Maxwell organizations.
Trustees allege money managers INVESCO MIM and Capel-Cure Myers passed more than œ50 million of pension assets under their control to Lehman, which, in turn, took them as security for loans to private Maxwell companies.
John Henderson, chief executive of Capel-Cure Myers, said: "We are satisfied that we acted on entirely properly authorized instructions from the trustees and all their agents. .|.|. We have not benefited financially or any other way from these events, and we intend to continue to defend our position."
Officials from Lehman and INVESCO MIM couldn't be reached.
Asked why Bank of America reached a settlement with the Mirror Group trustees before the mediator had concluded his work, Jim Mitchell, spokesman for the bank, said: "We were already involved with on-going discussions with trustess" before the mediator had been appointed. "We felt it would be more constructive to continue to negotiate directly with trustees."
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