TITMUSS Sainer & Webb corporate lawyers were misled by Robert and Kevin Maxwell over the debt owed between the Maxwell-related public and private businesses, a jury heard.
Partners David Fairfield and David Vogel and managing partner Dick Russell also discovered Robert and Kevin had reneged on a transaction to repay a $40 million debt to Citibank, a deal the lawyers themselves had advised on, the court heard last week.
The lawyers appeared as prosecution witnesses in the fraud trial of Kevin and Ian Maxwell who, with former director Robert Bunn and former Maxwell aide Larry Trachtenberg, deny charges of conspiracy to defraud through misuse of pension funds.
The firm, now Titmuss Sainer Dechert, acted for private company Robert Maxwell Group (RMG) for many years, Vogel said.
The court heard lawyers attended meetings in October 1991 with Kevin and his father and others. Talks concerned large debts that were owed by Maxwell private companies to several banks.
Vogel said Kevin Maxwell suggested that one debt, the $40 million owed to Citibank by RMG after a failed foreign exchange deal, could be repaid by selling Que, a subsidiary of MacMillan and owned by Maxwell Communication Corporation (MCC). This debt repayment was legal because MCC itself owed money to RMG, Vogel said he was told.
Senior prosecution counsel Alan Suckling QC said this was contrary to what Titmuss Sainer & Webb had been told on 14 August 1991 – namely that RMG owed £125 million to MCC.
“That was one of my concerns,” replied Vogel.
David Fairfield said he was called to a meeting on 25 October to “help document the arrangement that had been agreed to provide security or alternative proposals for the debt owed by RMG to Citibank”.
Others present included Clifford Chance partner Alan Inglis for Citibank and Citibank in-house counsel Jane Westbrook.
The court heard that the deal to repay Citibank was signed by MacMillan and Citibank on 31 October. Yet in November Kevin Maxwell said the deal was not binding and told Citibank the money would not be paid. Citibank later sued MacMillan.
Vogel told the court that he and his partners agreed the deal was not binding since, as Kevin told him in November, the deal was never, in fact, approved by the boards of either MCC or MacMillan.