The High Court in London gave judgment on Friday, 3 July 2020 on the relative ranking of over $10 billion of subordinated liabilities in the administrations of two entities in the Lehman Brothers group.

The Court of Appeal in London today gave judgment on Parts A and B of the Lehman Waterfall II Appeal, as part of the ongoing dispute as to the distribution of the estimated £8 billion surplus of assets in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).

The Supreme Court in London today gave judgment in the Waterfall I appeal, a dispute as to the distribution of the estimated £8 billion surplus of assets in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).

LBIE entered administration on 15 September 2008 and has now paid its unsecured creditors dividends of 100p in the £. The Waterfall I Supreme Court appeal addressed some of the key issues as to who should receive the surplus, which we discuss below.

“So-called” Currency Conversion Claims

The Court of Appeal’s decision in the case of Heis v MF Global highlights the importance of documenting just who has responsibility for contributing to a defined benefit pension scheme.

EIS AND OTHERS V MF GLOBAL UK SERVICES LTD (IN ADMINISTRATION) [2016] EWCA CIV 569, [2016] ALL ER (D) 125 (JUN)

In April 2015, the Supreme Court dismissed an appeal bought by The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme ("the Scheme") and held that Olympic Airlines SA ("Olympic Airlines") did not have an "establishment" in the UK when the Trustees presented a winding up petition in England on 20 July 2010.

The significance of the decision is that without a "qualifying insolvency event", the Scheme would not enter the Pension Protection Fund ("PPF") and is of significance for any defined benefit pension scheme of a UK branch office of an overseas company.

The Supreme Court has ruled that Financial Support Directions issued by the Pensions Regulator against insolvent companies can be claimed as provable debts in the insolvency process. The previous decisions of the High Court and Court of Appeal that they were to be paid as insolvency expenses have been overruled.

The decision was handed down in the Court’s judgment on the latest appeal in the long-running Nortel and Lehman saga, which arose out of a grey area in the elaborate statutory system for the funding of defined benefit pension schemes.