Japan Inc has embarked upon the overdue process of unbundling its conglomerate structures. Businesses that are being put up for sale include distressed oversees operations, particularly in the automotive sector. Managing the businesses while they are in distress, preparing them for sale, and eventually selling them, comes with a variety of legal and practical complications. The legal landscape will vary by jurisdiction, but the following aspects generally need to be considered in some shape or form regardless of the applicable law.

On 17 December 2020 the German Parliament has passed the rules on the further development of the German restructuring and insolvency law and it will now enter into force on 1 January 2021. An essential part of the law is the introduction of a corporate stabilisation and restructuring regime, which establishes a legal framework for out-of-court restructurings in Germany on the basis of the EU Restructuring Directive of 20 June 2019 (Directive (EU) 2019/1023) (the Preventive Restructuring Framework).

Summary

This briefing looks at the “period of grace” provisions that can apply in some cases to the debts that arise on employers under section 75 of the Pensions Act 1995.
In a multi-employer scheme, if one employer ceases to employ any active members, a s75 debt can arise on that employer. The period of grace provisions allow the employer to serve a notice so that the debt is suspended, giving the employer a period (at least a year, but potentially up to three years if the trustees agree) in which to employ an active member.

Summary

Third parties associated with an employer may find themselves liable to contribute to the employer's occupational pension scheme. Where a pension scheme is in deficit, the Pensions Regulator has powers - so-called 'moral hazard' powers - that can require a third party to give financial support or a specific payment to the pension scheme.

Summary

Pension scheme trustees will generally be concerned to try to ensure that the “safety net” provided by the Pension Protection Fund (PPF) remains potentially available for their scheme.

Summary

On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case: Re Nortel Companies [2013] UKSC 52. The Court looked at the position where a contribution notice (CN) or financial support direction (FSD) was issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings in England (eg administration). How does the relevant obligation rank in the order of priority of payment?

Snapshot

The Supreme Court handed down its long-awaited judgment today in the Nortel/Lehman case on where a contribution notice (CN) or financial support direction (FSD) issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings (eg administration) ranks in the order of priority of payment.

 Summary