No `fire sale' for bank
Maxwell Trial: Day 61
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.JOHN WILLCOCK
Financial Correspondent
Although US bankers Lehman Brothers wanted to sever its connection with the Maxwell empire, the last thing it planned to do was to adopt a "fire- sale approach" to cutting its exposure, the Old Bailey fraud trial heard yesterday.
New Yorker Mark Haas, head of the bank's money broking and international securities division in London, revealed that in the two months before Robert Maxwell's death in November 1991 the bank became concerned about the account. It wanted an immediate reduction from $160m (pounds 107m) to $100m, but an "exit strategy" was its ultimate aim.
He said that if the bank had taken the fire-sale approach and forced the Maxwells to sell off securities it could send all the wrong messages to the market.
Mr Richard Lissack QC, prosecuting, asked: "Did you want to precipitate a collapse of the Maxwell group?"
"Absolutely not," the witness replied. Asked what were the problems in September and October 1991, Mr Haas said one was that the bank was "greatly concerned" to discover that some of the collateral given by the Maxwells for stock lending transactions was of no value.
In addition, some representations about the timing of "deliveries" that had been made by both Robert and Kevin Maxwell were not kept and this affected the bank's view of them.
Asked to give his view of the tycoon when he first had contact with the Maxwell group, he said: "I knew that he was quite a colourful fellow and liked to see his name in the newspapers and I think I was aware that his sons were activitely involved in the business as well." He added: "In Robert Maxwell's absence I think that Kevin Maxwell was absolutely the man in charge."
His contact with the group was mainly with Larry Trachtenberg, who he knew to be a "quite senior" Maxwell executive and a director of Bishopsgate Investment Management.
Lehman's was involved in stock-lending deals with BIM and the first time he knew that BIM had something to do with the Maxwell group's pension funds was in August 1991 when he discussed the situation with Mr Trachtenberg, Mr Haas told the jury he had not regarded that information as significant in any way. Asked why not, he replied that he did not consider the transactions undertaken with BIM to be unsuitable for a pension fund or for any other client of the bank.
Kevin and Ian Maxwell and Mr Trachtenberg deny conspiracy to defraud the pension funds by misuse of its investments.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments