Recent cases we have been involved in have highlighted the need for Insolvency Practitioners to pay careful attention to the effect that block transfer orders have on administrations where the exit route is a creditors' voluntary liquidation ("CVL"). Failure to do so could risk the appointment of liquidators being invalid.

The statutory requirements

On 30 September 2016, the Competition and Markets Authority (“CMA”) published its finding that two companies involved in the online retail of licensed sport and entertainment posters and frames had breached the Competition Act 1998 (“CA98”) by entering into agreements (or, at least, ‘concerted practices’) to artificially inflate the prices charged for certain products. A formal charge was accepted by the main protagonist, Trod Limited (in administration) (“Trod”) and fines imposed, which became payable by Trod’s administrators as of 13 October 2016.

Summary

WATERFALL IIC JUDGMENT (ISDA MASTER AGREEMENT ISSUES)1

The Court of Appeal has resolved previously conflicting case law to confirm that a bankrupt cannot be obliged to crystallise his pension benefits in order to produce income to pay off creditors.

In the May 2015 edition of Pensions Priorities we reported on a case where the High Court found that an agreement dealing with the costs associated with the secondment of employees between group companies included liability for the receiving company to pay for the section 75 debt arising in relation to the seconded employees.

Long service changes

A recent case in the insolvency courts has seen the court considering the possibility of forcing a bankrupt pension holder to draw down funds to be used by their trustee in bankruptcy.

Time will tell whether this type of order will filter into financial settlements on divorce. There are already a number of options for dealing with pensions on divorce that I consider with my clients, particularly when creating bespoke and creative solutions for them. The ability to force someone to draw on their pension would have to be seen as a last resort but would be a tool worth having.

The recent Court of Appeal decision in Horton v Henry has highlighted the protection afforded to a bankrupt holding a private pension to the detriment of his bankruptcy creditors.

Facts

The High Court in London handed down judgment on Part C of the Lehman Waterfall II Application on 5 October 2016.

The judgment examines the extent of creditors’ entitlements to Default Rate interest on debts arising under ISDA Master Agreements governed by English law and New York law. As some £4.4 billion of LBIE’s admitted claims arise under ISDA Master Agreements and the debts were outstanding for more than five years, this judgment will materially influence the amount of money which must be applied in satisfaction of creditors’ entitlements to statutory interest.