View from City Road: Maxwell players try to leave past behind

It would perhaps be churlish to suggest that the pounds 40m settlement between the Mirror Group Pension Trustees and Invesco, Lehman and Capel-Cure Myers is better for MGN shareholders than for the Maxwell pensioners.

The trustees were, after all, seeking pounds 200m, which included a hefty claim for damages against the institutions for not 'blowing the whistle' on Robert Maxwell's activities. And the settlement will only contribute about pounds 8m to non- Mirror pensioners of the Maxwell empire, or about 4 per cent of the latter's outstanding claims.

For MGN, however, pounds 32m in cash for its pension fund is certainly a shot in the arm, though an indirect one - as it reduces a future obligation on the company to support the fund.

Why then did the MGN share price not respond? The answer is that there are a number of bigger issues affecting MGN, including the price war with News International, the possibility that it will have to repay pounds 75m of government support for MGN pensioners, and the proposed consortium offer for Newspaper Publishing, owner of the Independent.

The main benefit of yesterday's settlement to MGN was to put yet further distance between the company and the Robert Maxwell saga. Invesco and Capel-Cure Myers both cited the potential damage that a protracted trial could cause them as an important reason to settle. Yesterday's announcement shows how important the threat of bad publicity can be to institutional behaviour.