Some 6,500 former MG Rover workers will get only £3 redundancy—seven years after they lost their jobs.
Their legal case to recover millions of pounds was rejected by the High Court.
This leaves just £22,000 in a fund to be distributed among all the workers who were sacked when the firm went bust in 2005.
The Phoenix Four—John Towers, Nick Stephenson, John Edwards and Peter Beale—bought the company for £10 in 2000. Along with former MG Rover chief executive Kevin Howe, they paid themselves £42 million.
Towers suggested up to £30 million could be put in a trust fund after the firm’s assets were liquidated in 2005.
But the banks and other creditors, along with the bosses, got their hands on the cash first.
Workers and their families pinned hopes on a legal case to recover £12.5 million from Halifax Bank of Scotland, one of the company’s biggest creditors. But the courts have decided the bankers are more deserving of the money than the workers.
Former worker Oliver Thomas, of the Justice for Rover Workers group, said “This is a sad moment where our hopes of cash being transferred into the trust fund rely on yet another plea to the ex‑owners.
“They will tell you that they kept MG Rover running for five years, and did their best.
“Others will argue it was actually the 6,500 ex-workers who kept MG Rover running for five years, but who were then repaid by being made redundant with no payout while the Phoenix Four walked away with £42 million.”
There was a magnificent march through Birmingham in 2000 after BMW decided to sell MG Rover off and break the group up. It was organised by the trade unions and supported by workers from all over Britain.
But so as not to embarrass the Labour government, a deal was signed. This gave a temporary reprieve for jobs but also got the government off the hook.
Phoenix Venture Holdings bought the company for £10 and received an interest-free loan of £427 million from former owners BMW.
The new bosses enriched themselves further by building a £17 million pension pot for themselves. Meanwhile the workforce’s pension fund was allowed to drift into the red.
After a fire sale of company assets a massive £400 million hole in the accounts emerged.
Union leaders often complain about the decline of manufacturing.
The lesson of MG Rover is that looking for a nice boss to bail out a company will be a disaster. The workers are still paying the price for that mistake.