There has always been a tension between protecting the interests of defined benefit pension schemes and insolvency given on the one hand The Pensions Regulator (TPR) seeks to protect the interests of pension scheme members and the Pension Protection Fund and on the other, the insolvency regime seeks to protect the interests of creditors as a whole.

The benefit of hindsight is a wonderful thing. The benefits of a fully functional crystal ball to see the future would be much better. All pensions lawyers (and scheme actuaries) would add it to their gift list!

I will attempt to take a look at the pensions related announcements in Monday’s budget from a future (perhaps optimistic) vantage point.

So here we are, nearing the end of 2023…

1. Dashboards

The recent High Court decision in Caribonum Pension Trustee Limited v Pelikan Hardcopy Production AG [2018] EWHC 2321 (Ch) will provide some comfort for pension plan trustees owed money by insolvent sponsoring employers by allowing trustees to pursue guarantors within the same group for those debts.

What was contended to be an abuse of Court process has been confirmed by the Court as a legitimate debt recovery strategy. This was on the basis that a contractual agreement, a guarantee, was in place that was legitimately enforceable by a pension plan trustee.

The DWP is consulting on new powers for The Pensions Regulator (TPR). The consultation covers:

The Department for Work and Pensions has issued a consultation paper which seeks to strengthen the powers of TPR in connection with defined benefit pension plans, coming in response to recent corporate failures which had pension plans with significant deficits.

The proposals introduce four new “notifiable events” in addition to those that already exist, the introduction of hefty (potentially unlimited) fines, through the introduction of new civil and criminal penalties and widening the net of those potentially liable for an offence, to include directors.

Will your business be financially viable at the end of lockdown? What challenges does 2021 pose? What are the next steps

There was a magical place that’s now in administration. It’s called ‘Toys R Us’, Toys R Us’, Toys R Us’.

In the final part of our predictions for 2021 for the UK insolvency market we look at pensions, the National Security and Investment Bill and cross border matters.

“There’s a magical place, we’re on our way there, with toys in their millions, all under one roof – it’s called… Toys R Us!”

The lyrics resonate with millions worldwide. The advert is as iconic as Coca Cola’s “Holidays Are Coming” commercial or the Sainsbury’s “Christmas is for sharing” World War 1 cinematic ad. Sadly, there is no longer a magical place aura emanating from the retail giant, but a sobering reality that its financial disarray may lead to the company’s demise.

As this Blog has discussed in a number of recent posts, free and clear sales under section 363(f) of the Bankruptcy Code often lead to disputes over whether section 363(f) can strip assets of particular types of claims and interests. Although section 363(f) plays an important role in maximizing the value of a debtor’s assets in a section 363 sale, adversely affected parties may object to those assets being sold free and clear of their claims.