Maxwell’s Son Quits Top Post at N.Y. Daily News

In the latest blow to stability at the financially strapped New York Daily News, Kevin Maxwell resigned as publisher Monday, apparently overwhelmed by the task of containing the collapse of his late father’s worldwide media empire.

“The time he could put in here would not be adequate on a daily basis,” Daily News spokesman John Campi said in explaining the 32-year-old scion’s resignation.

Moreover, Maxwell has come under increasing suspicion in the tangle of investigations that has followed the mysterious death at sea last month of his father, Robert. With authorities investigating alleged financial misdeeds by the Maxwells--accused of plundering their British-based companies’ pension funds--Kevin Maxwell has had to seek permission from British courts every time he visits New York.

“Kevin Maxwell had said at the beginning that once he thought he was a liability, he would resign,” Campi noted.

The future of the Daily News, New York’s largest tabloid, is in doubt following its filing for bankruptcy court protection Dec. 5. The paper, rescued from threatened closure by Robert Maxwell only in March, apparently was propped up in part by money removed from the pension funds of Maxwell’s London-based Mirror Group.

James Willse, editor of the paper and the man who has been de facto publisher in dealing with the bankruptcy courts, was named to replace Maxwell.

Media analyst John Morton saw Kevin Maxwell’s resignation as “clearly not a positive development for the future of the Daily News.” Added Morton: “It does raise questions about how dedicated the corporation is to keeping the Daily News alive.”

Kevin Maxwell has said that the News needs more than $150 million in new capital to ensure its long-term survival. There has been talk of unions buying the paper, but analysts said banks would probably be unwilling to finance such a takeover unless new management promised massive job cuts.

Campi insisted that the paper, which has been losing about $400,000 a week, will survive. “Without question, it will stand on its own and has the wherewithal to do it,” he said.

Morton was less optimistic. “The people who run the newspaper don’t have any control over what happens. . . . What’s important is whether there is someone with deep pockets who is there to pay.”

In other Maxwell-related developments Monday:

* The judge in the U.S. bankruptcy filing of Maxwell Communication Corp.--the unit that owns publisher Macmillan and other valuable holdings--expressed hope that an accord can be reached that will allow American and British courts to handle their respective cases without conflicts.

* Britain’s High Court blocked Maxwell Communication directors from trying to get control of the company’s U.S. assets and prohibited them from using company funds to pay legal fees.