Pension Protection Fund launches £300m claim following “shameful” Johnston Press sale deal

It was announced on Friday evening that the publisher had been saved by creditors through a newly formed company, JPI Media, as a result of a controversial insolvency procedure that enables firms to be sold without liabilities such as pension debt.

The deal means members now face cuts to their promised pensions if, as expected, the pension fund is taken over by the PPF.

Citing “concerns” about the pre-pack administration and the sale of Johnston assets to JPI Media, the fund is set to to lodge a claim of more than £300 million with Johnston Press’s administrators overseeing the sale process.

Details of the PPF’s move seem to centre around the implications of the pre-pack taking place only 48 hours before Johnston Press was due to make its monthly contribution into the scheme, a sum thought to be worth about £800,000.

The Times newspaper reports that the probe is also looking at whether the assets were properly marketed to other potential buyers.

The figure of £305 million pursued by the PPF against the assets of Johnston Press is estimated to be the cost of securing members’ benefits with an insurer.

However, as the new owners now own the assets, it is not known how the PPF will be able to recover any of the amount claimed.

Frank Field, chairman of the work and pensions committee, has since written to the Pensions Regulator asking whether it is right that JPI could have no continuing responsibility for promised pensions.

In his letter to Lesley Titcomb, chief executive of the regulator, Mr Field wrote: “It is difficult to understand why it is possible for JPI Media to acquire the business, no doubt in the expectation of generating a profit from it, but without taking any responsibility for its pension scheme.”

Mr Field also asked for her opinion on whether “you consider that adequate protections are in place to prevent schemes being dumped on the PPF at cost to pensioners”.

The Pensions Regulator said that it was working with the administrators and PPF “to understand the circumstances surrounding the sale” and “to assess the terms of the sale of the business to ensure the pension scheme has been treated appropriately”.

The official shortfall in the scheme was £40 million.

Johnston Press shareholders are also expected to receive nothing following the sale as it was deemed to have no value following the initial failed sale process, and Christen Ager-hanssen, the biggest shareholder in the former Johnston Press, said deal was “shameful”.

JPI has so far declined to comment.