Rescue Package for Bernard Matthews Benefits “Corporate Elites”

10 Oct 2016 --- The financial rescue package designed to help Bernard Matthews is benefiting "corporate elites" at the expense of its pension fund, according to a hard-hitting report.

The pension fund of Bernard Matthews is due to receive just 1p in the pound, as part of the financial rescue plan, a briefing report for the House of Commons work and pension select committee has found.

The report also found that the deficit is now likely to have grown to £20m ($25m) from £17.5m ($22m).

In September, turkey producer Bernard Matthews was sold to 2 Sisters food group owner Ranjit Boparan, under a pre-pack administration deal, with a pension deficit of £17.5m ($22m).

Rutland Partners, the erstwhile owner of Bernard Matthews, is expected to receive £39m ($48m) from the sale while lenders Wells Fargo Capital Finance and PNC Financial Services will receive a full payment of £464m ($576m).

“The administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities,” said Professor Sikka in the report.

"It is all too easy for companies, their directors and shareholders to extract cash and dump pension obligations to employees, leaving the Pension Protection Fund (PPF) or taxpayers to foot the bill, and effectively boost returns to corporate elites."