The market is experiencing almost unprecedented levels of liquidity, across public and private debt and equity capital markets. This is staunching restructuring activity, which might otherwise be expected to rise (not least as pandemic-related government support starts to withdraw). There are also many companies still sponsoring defined benefit pension schemes. The statutory and regulatory landscape in this area has evolved significantly in recent months – with new powers for regulators, and new restructuring tools for debtors.

In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.

In related Nortel and Lehman Brothers cases, the UK Supreme Court ruled in July that Financial Support Directions ("FSDs") and Contribution Notices ("CNs") under the Pensions Act 2004 rank as provable debts if issued against insolvent targets.

Overturning the decisions of Mr Justice Briggs and the Court of Appeal, the Supreme Court has ruled that such FSD or CN liabilities are not administration or liquidation expenses. It has also confirmed that they do not rank behind other provable debts (the option which had become known as the 'black hole').