Insolvency uncovered

THROUGHOUT his illustrious insolvency career, Peter Phillips has been involved in many strange and sometimes hilarious incidents. Here he recounts two tales from his book ‘Life after debt‘.

The case of Maxwell’s millions

Lichtenstein has a particular cachet for those interested in the world of opaque wealth. Those of you readers who have visited it will know that it looks about as close to one’s fantasy of what somewhere called Lichtenstein could appear as it could possibly be.

It is a dark towering gothic town nestling off the main railway line between Zurich and the Swiss Alps. It has as its principal, if not only, attraction – many, many banks – within which are contained an undisclosed number of private safe deposit boxes. One of these, it was discovered in the course of my enquiries, belonged to Robert Maxwell.

In the very early days of the collapse of the Maxwell empire, when there were three major accounting firms, in addition to my own, as well as at least as many legal firms, wrestling with the massive challenges of this complex corporate and personal empire, there was a widely held assumption that the mystery of the missing millions, or the mystery of the black hole in the pension funds, would largely be solved if only the secrecy laws in Switzerland and Lichtenstein could be by-passed.

I was eventually successful in obtaining permission to personally visit Lichtenstein and personally open, what was discovered to be, the safe deposit box of the late Robert Maxwell.

As you may well imagine, there was considerable excitement at the prospect of this visit and I found myself accompanied by not only my own solicitor, Peter Sigler, of Nabarro Nathanson in London, but a Lichtenstein lawyer who advised us throughout on the complexities of the world we were dealing with over there.

I remember the day very well. I was not merely apprehensive, but pleased that in the cost-conscious environment in which everybody was operating, I was going to be able to do what I had to do in one day, namely travel from London to Lichtenstein and back, travelling economy as usual.

Everything went to plan and, by lunchtime, we found ourselves taking the strange little bus that goes from the railway line in Switzerland into Vaduz in Lichtenstein.

We entered one of the dozens of similar looking banking establishments in the high street and were escorted down into a massive safe deposit.

One of the executives of the bank walked us to where Maxwell’s box was, among hundreds of others. He and I produced our respective keys and we opened the outer hinged door. I looked inside and, yes, there was the box. I had no way of predicting what was going to be found in it, but certainly among the various possibilities, what actually was found, was not on my list of possibilities.

I took the box to a nearby table and we eagerly surrounded it, while I put the key in it and opened the lid.

We craned our necks and looked in and discovered… a rubber band, and nothing else.

A number of us, of course, were extremely clever after the event, asserting that we were surprised even to find a rubber band.

It still however strikes me as more than a little strange that by a simple coincidence in timing, Robert Maxwell disappeared, was pronounced
dead, his empire collapsed and his safe deposit box was empty.

The secretary and the sexy secrets

For those of you turning to this story in search of salacious material, I regret you are going to be disappointed, but I think you will find it interesting for other reasons.

The name Ann Summers, of course, is now extremely well established, but I imagine that few people realise that the name Ann Summers was the name of the PA to the original chairman of the company that bore her name. The then chairman’s name was also one to conjour with… “Dandy” Kim Waterfield.

I first met Ms Ann Summers when, as company secretary, she was recommended to consult (my father) Bernard (Phillips).

The business was operated from three retail outlets, including two in London, and Ann Summers was accompanied by two brothers, Ralph and David Gold, who were very interested in acquiring the business as a going concern from its ultimate liquidator.

The company was in serious financial difficulties. I was in my late twenties and a little intrigued to see how my father would deal with obtaining the sort of information about the company’s business that he would need to share with creditors at the inevitable creditors’ liquidation meeting.

He was provided with voluminous and detailed lists of the company’s stocks and he leafed through it, apparently oblivious as to the true nature of the enterprise.

He paused at one stage and asked: “I see you have 3,000 cans of Love Foam, what is Love Foam?”

One of the Gold brothers, looking quite embarrassed, and who had evidently seen dad as an elegant sixty-year old chartered accountant, volunteered: “It comes in cans.”

Bernard pursued his enquiries with. “But what is it?” The hesitant response was: “It comes in eight flavours.”

Everyone in the room, except Bernard, was cringing. He pressed on. “But what do you do with it?”

A long pause ended with one of the brothers Gold admitting “You spray it on… the one you love.”

The inevitable further pressure from Bernard. “And then?”

An even longer pause and gulp for air, with yours truly wishing he was in another room in another place at another time. Then came the final admission. “You lick it off.”

I should like to say that that was the end of the interrogation but Bernard then moved onto asking for a better understanding of stock of 15,000 Go Go tablets!

I have often wondered since that time what my father’s memories of that meeting might be, but sadly I never had the nerve to ask him.

A couple of postscripts; the company proceeded into liquidation, Bernard was appointed its liquidator and, with the agreement of the creditors, the Gold brothers bought the business assets of Ann Summers. That business, in its massively enhanced form, is now managed by Jacqueline Gold, the daughter of one of the brothers.

A more sobering encounter took place shortly after the liquidation started, when a senior representative of the Department of Health came to see me about concerns they had over the safety of some of the earlier lines carried by the original company. He revealed that they were considering commencing proceedings against directors of the original company who might be regarded as responsible. The only director was unavailable and the only other officer, the lady who gave her name to the company, had had no managerial responsibilities.

To the best of my knowledge no proceedings were ever put in train.

Life After Debt is available from Troubador Publishing Life after debt


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