Pensions news - clarity on FSD claims against foreign companies?

Pensions news - clarity on FSD claims against foreign companies?

Claims brought by the trustees of the Nortel pension scheme and the Pension Protection Fund against the scheme's sponsor's insolvent Canadian parent company in the recent case of  Re Nortel Networks Corporation et al 2014 ONSC 6973 had some mixed success in the Ontario Superior Court of Justice.

Angela Dimsdale Gill, lead partner at Hogan Lovells, comments on the Canadian ruling that featured a claim based on the Pension Regulator's ability to issue a financial support direction (FSD) against the insolvent parent.

What particular issues were considered in this case before the Ontario Superior Court of Canada?

The Ontario court essentially decided three claims brought by the trustee of the Nortel Networks UK Pension Plan and the UK Board of the Pension Protection Fund (PPF), principally against Nortel's Canadian parent operating company (Nortel Networks UK Limited (NNL)). Those claims were:

  • claims under two guarantees granted by Nortel's parent company in Canada (in Canadian CCAA bankruptcy proceedings), and
  • a claim in respect of contingent liability to secure financial support for the Nortel UK Plan under the FSD regime under English law

What were the key conclusions the court reached on the various claims brought by the trustees and the PPF?

The court allowed one of the trustee's

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