The following Restructuring & Insolvency guidance note Produced in partnership with Raquel Agnello QC of Erskine Chambers and Thomas Robinson of Wilberforce Chambers provides comprehensive and up to date legal information covering:
The Supreme Court decision in the case of Nortel/Lehman has clarified the status of Financial Support Directions (FSDs) issued under the Pensions Act 2004 (PA 2004) to companies in UK administration. It provides important guidance on the ranking of FSD liabilities in insolvency as well as on:
the proper construction of IR 2016, SI 2016/1024, rule 14.1 (formerly IR 1986, SI 1986/1925, r 13.12(1)(b)), defining contingent debts that may be proved in an insolvency
the nature of insolvency expenses, and
the court's residual discretion (if any) to direct payments be made outside the statutory scheme of distributions
The decision also deals with the status of contributions notices issued under the PA 2004, s 47, which enforce compliance with FSD's. FSDs are one of the moral hazard powers available to the Pensions Regulator. For more information on these, see Practice Note: The Pensions Regulator and its power to issue a contribution notice and financial support direction.
The case, on appeal from the Court of Appeal  EWCA Civ 1124, was brought by the UK administrators of various Nortel companies, as well as the UK administrators of various Lehman Brothers companies.
Both sets of administrators sought directions from the court as to whether, as administrators appointed under Sch B1 of the Insolvency Act 1986 (IA 1986), they
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