Phoenix Four pay £3m of own money to firm

The former owners of MG Rover have paid £3 million from their own pockets to the liquidators of the car company in a deal to prevent future claims, it was revealed today.

The so-called Phoenix Four – John Towers, Nick Stephenson, John Edwards and Peter Beale – have struck the deal with PricewaterhouseCoopers (PwC), the accountancy firm that handled the administration of MG Rover when it collapsed with debts of £1.6 billion. PwC is dealing with the liquidation of the group, trying to raise as much money as possible.

It needs to pay around 5,000 creditors including former employees.

The four remain directors of Phoenix Venture Holdings, which in turn owned MG Rover. A spokesman for the four said today: "This is an agreement that PVH directors have reached with the liquidators of MG Rover, to pay £3 million for the benefit of MG Rover creditors, and in settlement of any future claims MG Rover creditors may make against PVH. The directors are paying this out of their own pockets."

The Government report into the MG Rover collapse, released this summer, found the four awarded themselves pay and pensions worth £42m during the five years they owned the business.

The four are currently under pressure to make payments into the Employee Trust Fund, set up in the days after the collapse in 2005 to aid the company's 6,000 former workers.

They say all assets of Phoenix Venture Holdings will go into the fund when PVH is wound up in the next few months.

The four directors have come in for heavy criticism since the collapse of MG Rover, and September's report accused them of giving themselves "unreasonably large" pay-outs.

But the Phoenix four hit back, describing the £16m report as a "witch-hunt".

The Serious Fraud Office has since announced it will not begin a criminal investigation into the collapse of MG Rover.