Today is the first day of a three-day High Court hearing to determine whether a 10,000 piece collection housed at the Wedgwood Museum is protected from administrators seeking funds for a £134m pension shortfall.
The Wedgwood Museum (inc. £2.6m) went into administration in April last year after it was served with a substantial pension debt by the company that was set up to manage the Wedgwood Group pension plan.
The museum is in the unfortunate position because of its participation in a multi-employer pension scheme covering a number of employers in the Waterford Wedgwood Group. Five of the museum’s staff are among the Wedgwood Group pension fund’s 7,000 members.
When the Waterford Wedgwood group went into administration in 2009, the museum found itself the remaining last employer in that scheme.
Therefore, the museum technically became responsible for a pension debt that is in the region of £134m under pension legislation introduced in 2005.
Bob Young and Steve Currie of corporate recovery specialists Begbies Traynor were appointed joint administrators of the Wedgwood Museum Trust in April 2010, and have since been fighting a protracted battle through the courts to determine the future of the Museum’s 10,000 Wedgwood piece collection.
The Charity Commission was asked to provide a view on whether the collection is held in permanent endowment or whether it is part of the charity’s corporate property, which is available to creditors.
It reached the conclusion that the museum's collection was not protected.
So the pair have taken the case to Birmingham High Court.
Young said: “We are applying to the courts for direction on whether the collection must be sold for the benefit of the Pension Protection Fund or whether the assets can remain in trust as legal advice to date has been far from clear on this point.”
The case is scheduled for a three day hearing beginning today, but no decision by the judge is expected to be made public until the end of October.
Young said: “At this stage of the administration the exit route is currently undetermined due to the uncertainty of the outcome of the hearing to be held on in relation to the ownership of the collection held at the museum.”
And he clarified that media reports in which Begbies Traynor were reported to have billed fees of £113,170 since the beginning of the administration, a total of £156,000 in costs which includes legal advice, were inaccurate:
“We have ongoing time costs but have currently billed £60,000 for what has been a detailed and most complicated case requiring extensive partner time and high level legal advice on what we believe is a unique set of circumstances with very little precedent to go by.
“Our aim at all times has been to try and achieve an equitable result for all concerned within the law and that is why we are seeking guidance from the High Court,” he said.
