Swiss Bank Corp. said Wednesday that the Robert Maxwell family has defaulted on a $99-million (55-million British pound) loan but vowed that it would help prevent any collapse of the late tycoon’s media empire.
Banks that have been big lenders to Maxwell fear that defaults could snowball if smaller creditors follow the Swiss Bank lead and demand repayment.
With that in mind, National Westminster Bank and Lloyds Bank, two of Britain’s biggest, are spearheading an effort to win acceptance for a freeze on principal payments on an estimated $1.35 billion (750 million pounds) of the family’s debt.
Maxwell, who died at sea Nov. 5, left behind a huge empire--part private, part publicly traded--that includes publisher Macmillan Inc., New York’s Daily News and a string of high-profile media holdings across Europe.
A Swiss Bank spokesman said his institution declared the loan in default because promised collateral was not available. But he said the bank was prepared to consider all options suggested by the Maxwell family.
“It is not in our interest to precipitate anything, but we are in a very unusual position. It’s not every day the security you are entitled to is unavailable,” the bank spokesman said.
The loan, made to a family-controlled company called Allied 188 Ltd., is being investigated by Britain’s Serious Fraud Office after a complaint by Swiss Bank.