American may have role in Maxwell funds transfer

December 11, 1991|By New York Times News Service

LONDON -- An American suspected of having played a central role in helping Robert Maxwell siphon off hundreds of millions of dollars from employee pension funds has been barred from leaving Britain, it was disclosed yesterday.

Larry Trachtenberg, who became a director of Bishopsgate Investment Management Ltd. in September and resigned last week, was ordered by a judge not to leave the country.

Mr. Trachtenberg was also an executive at London and Bishopsgate International Investment Management PLC, which is under investigation for its role in transferring pension funds.

The disclosure came at a news conference held by Neil Cooper, a corporate-recovery expert whom an English judge appointed Sunday night to take control of an investment-management firm owned by the Maxwell family, and by Margaret Cole, a lawyer assisting him.

The Bishopsgate firm is believed to be at the heart of the system masterminded by Mr. Maxwell to move $1.38 billion from pension funds and two public companies controlled by the Maxwell family.

"He was obviously central," Mr. Cooper said of Mr. Trachtenberg.

Investigators say they believe Mr. Maxwell used the money in a desperate and ill-fated attempt to prop up his private companies. Last week, a month after his death, his two main private companies filed for the British equivalent of bankruptcy protection. Now, most of the Maxwell empire is expected to be sold off.

Miss Cole said success in tracing the assets was no guarantee they would be retrieved because the financial institutions that now have them may be able to assert legal rights to them.

Conflicts over ownership could arise, she said, because a Maxwell firm, possibly Bishopsgate, might have had title to the pension fund shares and sold them to others when

Mr. Maxwell was said to have ordered the firm to raise cash. Now title to those shares may be legitimately held by other institutions.

The judge's order to Mr. Trachtenberg required him to surrender his passport until he had provided any information he might have on Bishopsgate.

The judge took the same action earlier this week against Mr. Maxwell's two sons, Kevin and Ian, and also froze up to $812.9 million of Kevin Maxwell's personal assets.

Kevin Maxwell is considered to have been more involved in efforts to transfer pension fund assets than his older brother. But early yesterday, the judge decided to allow Kevin Maxwell to go to New York to work on the reorganization of the Daily News, which filed for bankruptcy protection last week.

Kevin Maxwell had argued that his presence was urgently needed in New York to save the newspaper; the judge told him to return by Friday evening.

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