The High Court has allowed an application for an order to enable access to a bankrupt’s pension to satisfy debts arising from fraud. Prior to the bankruptcy, judgment was obtained against him for £3.2m plus costs.

Pension Protection Fund: valuation assumptions

The PPF has consulted on changing the assumptions used for section 143 valuations (used for schemes  in assessment periods) and section 179 valuations (used when setting a scheme's risk-based levy).   The PPF expects that the proposed changes would increase section 143 and section 179 liabilities by  just under 4% and would potentially lead to a small increase in the number of schemes transferring  to the PPF.

Pension Protection Fund: insolvency risk provider

In In re Louisiana Riverboat Gaming P’ship (Global Gaming Legends, LLC v. Legends Gaming of Louisana-1, LLC) (“Global Gaming”), the United States Bankruptcy Court for the Western District of Louisiana stayed discovery in an adversary proceeding pending decision on a party’s motion to withdraw the reference to the district court, finding too much risk that the bankruptcy court would later be found to be without authority to handle pre-trial discovery for the “Stern-governed” core claims at issue. Adv. Proc. No. 13AP-1007 (Bankr. W.D. La. Jan. 10, 2014).

In an adversary proceeding filed in the American Home Mortgage Holdings, Inc. bankruptcy case, the Delaware bankruptcy court affirmed that triangular setoffs are not allowed under the Bankruptcy Code and cannot be modified by contract or under the Bankruptcy Code’s safe harbor provision. In re American Home Mortgage Holdings, Inc., et al., Adv. Proc. No. 11-51851 (Bankr. D. Del. Nov. 8, 2013). Two contracts were at issue – a swap agreement between a bank and American Home Mortgage Investment Corp.

In re Big M, Inc., No. 13-10233 (DHS), 2013 WL 1681489 (Bankr. D.N.J. April 17, 2013). In Big M, the Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”) held that the debtor’s privilege did not pass to the creditors’ committee, even though the creditors’ committee obtained authority to investigate certain of the debtor’s causes of action, because the committee was acting as a fiduciary to creditors as opposed to the debtor’s estate.

HIGHLIGHTS

The credit crunch caused problems for businesses at the same time as the value of pension scheme assets plunged, adding ballooning defined benefit pension deficits to the woes of struggling companies.

Company insolvencies, and attempts at restructuring to avoid insolvencies, can have a significant impact on the pension schemes sponsored by those companies. The pensions issues can also act as a significant obstacle to restructuring.

Proposals issued October 2010

Confirmation given 31 January 2011

Policy statement issued May 2011

Draft guidance on the bespoke measurement of investment risk issued May 2011. Consultation ends on 24 June 2011

Consultation on the 2012/13 levy determination expected in autumn 2011

The PPF has confirmed its intention to implement a new levy framework from 2012/13. Key features of the framework confirmed in the policy statement include: