Robert Matthews said that accepting less than 10% of the remaining £38.5m the scheme was owed by the group was the "least worst" option available to the trustees, based on the information available to them.
In its correspondence to members of the scheme explaining the decision, the trustee stated that ‘all unsecured creditors’ had been required to give up their claims in order for the pre-pack sale to Sun Capital Partners to take place. However, PrintWeek can confirm that Polestar’s trade creditors did not have to give up their claims.
"It is accepted that trade creditors will be paid," Matthews explained. "But other unsecured creditors have received no more favourable treatment than the [pension] trustee. Trade creditors have not been paid at the expense of the pension fund," he said.
Matthews told PrintWeek that negotiations over the settlement had been an "annoying, frustrating and upsetting experience".
He said: "Polestar has reneged on its obligations twice in the past five years, to the tune of hundreds of millions of pounds. They have put the pension fund in dire straits yet they continue as management proclaiming some sort of success."
After "long and very difficult" negotiations the scheme eventually accepted a settlement comprising £2.6m owed to it over which it had a charge against certain Polestar assets, plus an additional £1m. After the scheme was spun off from the company in 2006 it was due to be paid £45m over 12 years, of which it has received £10.1m, leaving a near-£35m shortfall.
Matthews said: "We supported it only because we were between a rock and a hard place, and we took the least worst deal available. Polestar was very close to going into administration and it would have been a real fight to get our £2.6m, and likely a very prolonged exercise.
"It is appalling that legislation allows companies to go into pre-pack and walk away from their obligations."
He added: "Polestar’s negotiating team were not apologetic at all. There was no feeling that they had a moral obligation towards the pension fund."
Matthews also responded to industry speculation that other potential purchasers, other than Sun Capital, could have been interested in buying all or part of Polestar. "I’ve heard this rumour but it’s totally contrary to what I’ve been told verbally and in writing," he stated. "I have seen no evidence that a realistic offer had been made."
Meanwhile, the Financial Times has highlighted the Polestar pension deal in an article about growing fears over private equity investors circumventing "moral hazard" provisions in UK pensions law, although it said the Pensions Regulator was unlikely to pursue a claim in Polestar's case because it gave permission for the company to hive off its pension scheme in 2006.
A separate FT article on the fine line the Pensions Regulator has to walk between preserving jobs by keeping businesses alive and protecting employees retirement savings also cited the Polestar deal, going into some detail on the events leading up to Sun Capital Partners' acquisition of the company.
