MG Rover's Phoenix Four facing legal action to pay out £22m

Nov 4 2009 By Jon Walker

“I say no to that. Let the proceeds of MGR Capital be at least one positive legacy of the Phoenix years. I say to the Phoenix consortium, put part of your share of MGR Capital’s profits towards the trust fund for your former employees.

“And the rest of it in to a community development trust so that local people can have a direct say and a direct benefit into the redevelopment of the Longbridge site and the surrounding area.”

Business Minister Ian Lucas, responding to the debate for the Government, told him: “That is a moral obligation. And I say to my honourable friend that anything I can do in terms of both that moral obligation and exploring whether there is any formal legal obligation involved which would enable action to be taken, I would support too, on his behalf and on behalf of his constituents in the West Midlands.”

But a spokesman for the Phoenix directors appeared to rule out and handover of the cash.

He said: “They invested their own money in 2001, and took out an extremely large loan from HBOS.

“They took a risk, as this was a loss-making business at the time. They turned it into a profitable company.”

The spokesman said the intention was still to donate assets from Phoenix Venture Holdings to the workers’ trust fund, once that business was wound up.

>Jon Walker's Blog: Don't hold your breath waiting for the MG Rover Trust Fund to pay up