Wedgwood Museum faces threat of forced sale

Published Thursday, 17 November 2011
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Museum could be forced to sell its collection to make up shortfalls in the Wedgwood Group pension fund

The Wedgwood Museum in Stoke-on-Trent is waiting for a legal judgment that could threaten its future.

Government safeguards introduced to protect employee pensions after Robert Maxwell's raid on company pensions may prove disastrous to the museum, which has a multimillion-pound china collection, and masterpieces by Stubbs, Romney and Reynolds, and an archive linked to the nation's social and industrial history.

Wedgwood Museum has not been legally connected to Waterford Wedgwood Potteries, which went into administration due to financial difficulties two years ago, for nearly half a century. But because five of the Pottery Group Pension Plan's 7,000-member scheme became employees of the museum seven years ago, administrators of the museum – which went into administration last year but remains open – may be held liable for a £134m hole in the pension fund.

The case pits the museum against employees because of their pension rights. It may adversely affect other national museums or institutions arising from charity in a similar situation, it is feared, and is seen as a test case.

The legal case was brought to the Birmingham high court by the administrators of the museum, Bob Young and Steve Currie, who are corporate recovery specialists in the firm of Begbies Traynor. They and the Potteries, along with the Pension Protection Fund (PPF), now await the judgment on whether the museum must sell its collection to make up shortfalls in the Potteries pension fund.

Treasures facing an uncertain future include two rare Portland vases – Wedgwood pieces each valued at about £1m – and the archive of Josiah Wedgwood, the company's 18th-century founder.

The prospect of the museum being held liable for such a debt has sent shockwaves through the art world.

Simon Wedgwood, one of Josiah's descendants, said that most of the museum's collection was donated by his family and the judgment could have major implications for other public collections and future donations: "Should the museum collection be sold, the upshot would be a tragedy for museums generally, the nation's loss of a completely unique history of one of England's most celebrated businesses."

Gillian Wolfe of the Dulwich Picture Gallery said: "It will be a tragedy if such an integral part of our own industrial heritage is not kept together in this country."

The court is also considering national interests, represented by the attorney general, because the PPF set up by government after the Maxwell scandal supports the pension trustees' claim.

When the Potteries went into administration and was sold, its new owner, an American private equity firm, KPS Capital Partners, did not take on the pension shortfall. The museum was dragged into the case after the Potteries administrator applied for PPF help.

Legislation prevented companies hiding assets from creditors, and any company linked to a pension scheme – in this case the museum – can be held responsible for pension shortfalls.

In a high court hearing in September, the museum argued that its trading is linked to a collection retained under charitable trust for the public benefit "in perpetuity" and so could not be disposed of as assets to pay off others' debts. © Guardian News and Media 2011
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