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.
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