After six years of legal action and investigations, the Pensions Regulator (TPR) has agreed a £184 million settlement with PwC, administrators for the Lehman Brothers Group, which has secured members' benefits under the UK pension scheme.  It also means the scheme will not go into the Pension Protection Fund (PPF).

Following the insolvency of the Lehman group in 2008, TPR began regulatory action in 2010 seeking the issue of a Financial Support Direction (FSD) to certain UK group companies.  An FSD requires recipients to provide extra financial support to a scheme.

This update considers the recent High Court decision in Thomasand Another v Edmondson (12/05.2014) concerning the court’s ability to make an income payment order against a bankrupt who is already subject to an income payment agreement.

The background

This update focusses on Teresa Graham’s recent review on pre-pack administration published by the  Government which sets out areas for improvement and provides detailed recommendations to help better the procedure.

The background

Preamble

The COMI rules prevent a foreign based company from accessing the UK insolvency regimes, unless it has a sufficient connection with the UK. However, in Christophorus 3 Limited the High Court approved the ‘flipping up’ of a specially created UK newco in a German group to enter administration.

The background

The High Court described this case as ‘an elaborate scheme for the restructuring and refinancing’ of a German group.

Many schemes will see a sharp increase in their levy next year  as a result of the PPF’s new and more discriminative insolvency  scoring system.

To give you an idea, the PPF expects:

Introduction

The Chancellor’s 2014 Budget speech revealed significant  changes to the way in which pension scheme members will be  able to access their savings. This move falls as just one of a raft  of changes to workplace pensions which Steve Webb MP has  described as a “pensions revolution”.

This update focusses on a range of issues affecting IPs from the past two months, covering the consultation on fees announced in February, the HMRC announced changes to the VAT deregistration regime, when accountants may be required to produce documents under Sections 235 and 256 of the Insolvency Act, and a recent Court of Appeal decision on when a company may be considered to be insolvent for the purpose of Section 238 actions

Consultation on the regulation of Insolvency Practitioners and IPs’ fees

Landlords will be relieved that the Court of Appeal has closed a legal loophole in a test case arising out of the administration of the Game group of Companies – Pillar Denton Ltd & 5 others v (1) Jervis (2) Maddison (3) Game Retail Ltd [2014] EWCA Civ 180.

Can a debtor be found to be balance sheet or cash flow insolvent even though its obligations are limited (in terms of creditor recourse) to the available assets? This was the question facing the High Court in Re ARM Asset Backed Securities SA [2013] EWCH 3351.

The background

What happens to funds held in escrow when the paying entity goes into administration?

The background

Escrow mechanisms are familiar territory for most practitioners. The case of Bristol Alliance Nominee No. 1 Ltd and others v Neil Andrew Bennett and others [2013] EWCA Civ 1626 explores what happens when funds are held in escrow at a time when the paying entity goes into administration.