In our recent article of 4 November 2014 we referred to a new case where the controversial decision in Raithatha v Williamson would be reconsidered.
On 17 December 2014 the High Court handed down judgment in the case of Horton v Henry. The decision has been highly anticipated.
Declining to follow a 2012 decision, the High Court has ruled that a bankrupt’s unexercised rights to draw his pension did not represent income to which he was entitled within the meaning of the Insolvency Act 1986, and so did not form part of the bankruptcy estate.
Background
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”.
Gowling WLG's finance litigation experts bring you the latest on the cases and issues affecting the lending industry.
Uncrystallised pension pot remains protected following bankruptcy
The Court of Appeal in England has confirmed that a Trustee in Bankruptcy (“TIB”) cannot force a bankrupt person to elect to take their uncrystallised pension benefits solely so that the TIB can recover the benefit as income for the member's creditors. The decision in Horton v Henry (2016) clarifies the legal position after previous conflicting judgements had been given by the Courts.
Scenario:
Yesterday Treasury released "guidance on its role in the exploration of a possible initial public offering of the common stock of General Motors Company." Under the Troubled Asset Relief Program, Treasury acquired 60.8% of GM's common stock and $2.1 billion of its preferred stock in connection with GM's restructuring last summer.
On November 1st, the Treasury Department provided an update regarding the federal government's involvement with AIG. AIG will use the proceeds from its sale of one unit and the IPO from a second to repay the loan extended to AIG by the Federal Reserve Bank of New York and to repurchase a substantial amount of the FRBNY's preferred interests in certain AIG subsidiaries. AIG will then draw up to $22 billion in remaining Troubled Asset Relief Program funds from the Treasury Department to restructure its governmental obligations.
Parks v. Dittmar (In re Dittmar), 618 F.3d 1199 (10th Cir. 2010)
CASE SNAPSHOT
After five years of litigation, on 3 April 2014, the US Department of Justice entered into a settlement agreement with Kerr-McGee Corporation and its parent company, Anadarko Petroleum (“Kerr-McGee”). This agreement requires Kerr-McGee to pay $5.15 billion in order to compensate for its environmental and tort liabilities of the past 85 years.
This agreement came after the 12 December 2013 judgment of the US Bankruptcy Court for the Southern District of New York in Tronox Inc., et al., v. Kerr-McGee Corp., et al. (In re Tronox Inc.), 503 B.R. 239 (Bankr. S.D.N.Y. 2013).