Fishermen who invested money in the West Side Fishermen co-operative may not see a penny returned to them after a pensions company stepped in with a claim which could wipe out their remaining funds of £240,000.
Around 100 fishermen and retired fishermen have been expecting cheques for over £2,000 each once the affairs of the former boat agency, fuel supplier and shop were finally sorted out by accountants and lawyers – a process which has dragged on for five-and-a-half years since the Scalloway-based co-op ceased trading.
Joint liquidators Baker Tilly in Edinburgh had been moving towards dishing out the £240,000 left after West Side’s debts were all settled but last month shareholders received a letter informing them that the co-op’s former pension scheme was persisting with its controversial claim for £460,000. Until the issue is resolved the shareholders’ funds have to remain in the bank.
The claim by the trustees of The Fishing Co-operatives (UK) Limited Retirement & Death Benefit Scheme has been known about for several years but has been hotly contested by the liquidator and West Side. In April they received legal advice from a QC in London that no money was owed to the pension scheme for the period after the co-op ceased being a participating employer in June 2004. Despite that, the scheme trustees will not budge from their claim.
Lawyers for the two sides have now reached an impasse and the matter looks set to go to court for a legal determination.
If the West Side shareholders win the court battle there should be money left to distribute but the liquidator has advised that, regardless of victory, they may have to pay the expenses of court action even though it has only been made necessary by the pension scheme’s actions.
The co-op’s last chairman, ex-skipper Joe Kay, is angry that the “considerable costs” of court action might have to come from shareholders’ funds. He said members were sickened by the inordinate amount of time being taken to wrap up the co-op’s affairs and the ongoing fees of lawyers and accountants which eat into the remaining money.
“What I find ironic in all this is the fact that many of the original shareholders of WSF are now pensioners. A lifetime fishing entitles you to no pension except government pension or whatever personal pension you may have afforded throughout this time.”
The settling of West Side’s affairs has been a slow process due partly to the complexities of dealing with debts owed by bankrupt fishermen and their boats. There was also a dispute among members about how the remaining funds should be divided up. However, Mr Kay said those affairs had been sorted out after a couple of years and since then the pension issue had bogged down progress.
The co-op was started in 1977 as a shop with many of the shareholders putting in £100 each. At one time it had 26 boats on its books and reserves of £960,000 in the bank but when hardship hit the whitefish sector the co-op struggled, ending up with just five whitefish and a few shellfish boats. Eventually its business was incorporated into its Lerwick rival LHD which had been kept buoyant by its pelagic fishing members who enjoyed boom years while the whitefish sector floundered.