Friday - 31 October 2014

Hope for Wedgwood Museum after white knight’s rescue plan

04 January 2012Written by Ivan Macquisten

A WHITE knight has stepped forward with an offer to rescue the Wedgwood Museum collection after a High Court judgment ruled it should be sold off to pay pension scheme creditors.

Potteries-born billionaire John Cauldwell, the Phones4U mobile phone entrepreneur, has offered to buy the entire collection and museum in a bid to keep it intact and in place.

Valued at up to £18m, the unique holding of objects and documents is a vital, UNESCO-endorsed archive for students of arguably the world's best-known pottery, giving important insights into how the company, processes and industry developed from the 18th century.

Discussions at ministerial level are the next step in deciding whether the rescue package can go ahead, but the ruling has also sparked concern for other institutions who may find themselves vulnerable to similar legal action as a result of the precedent set by the case.

As previously reported, an extraordinary legal loophole meant that although the museum, set up as an independent charitable trust in 1962, has had nothing to do with the Waterford Wedgwood company for nearly 50 years, it is being held liable for a £134m shortfall in the company's pension scheme.

Waterford Wedgwood went into administration in January 2009. It was then sold on but, under the terms of the deal, the US buyer did not have to take on the obligations of the pension shortfall, leaving the massive hole in the pension fund.

The problem is that five of the museum's employees are members of the Waterford Wedgwood company pension scheme and, under a statutory instrument brought in by parliament in April 2008 to prevent companies from hiding assets from creditors, any company with links to a scheme - in this case the museum trust's trading company - can be held responsible for its shortfall. As the museum trust trading company is the last firm linked to the scheme, the high court has ruled that creditors can claim the entire shortfall from it.

This was in spite of the museum's lawyers arguing that the trading company was set up on the understanding that the collection would be retained under charitable trust for public benefit in perpetuity and so could not be disposed of as assets to pay off debts.

The case arose after the Waterford Wedgwood group applied for help to the Pension Protection Fund (PPF), which was set up to guarantee minimum levels of pension payments to members of eligible funds. The PPF refused help to Waterford Wedgwood because, under the rules, it said Waterford Wedgwood should try to recover the shortfall from the museum's trading company.

That, in turn, meant that the Wedgwood Museum Trust was forced into administration, although the museum has been operating as normal.

The irony for the five employees is that the very rules set up to protect their pension interests could end up costing them their jobs.

The bulk of the collection was donated by the Wedgwood family or the company, with donations going back decades. A significant consideration in setting up the museum trust in the early 1960s was to protect its assets in the event of the company going public at some time in the future.

Even when Waterford Wedgwood did go under in 2009, the museum trust was deemed unassailable by creditors.

Antiques Trade Gazette is the weekly bible of the fine art and antiques industry. Read articles like this every week in the Antiques Trade Gazette or ATG app. Click here to subscribe today.

Back to top