In October 2009 the Greek airline, Olympic Airlines SA ("OA"), entered "special liquidation" in Greece after the European Commission ordered it to repay illegal state aid from the Greek Government. OA employed about 27 employees in the UK, who participated in an occupational pension scheme. In June 2010 OA's liquidator informed the scheme's trustees that the UK employees' employment would be terminated and that pension contributions would cease from July 2010.
- Transfers
From April 2012 it has been possible to make transfer payments from contracted-out to contracted-in pension plans. Many members have a statutory right to such a transfer (irrespective of contrary restrictions in pension plan rules). Legislation sets down a number of member safeguards that must be met. Any transfer is subject to a receiving scheme being willing to accept it. Trustees should be aware of the impact on administration and member communications.
The new Insolvency rules which came into force on 23rd February 2012 provide that when presenting a Petition, the Petitioning Creditor must now conduct an initial search to ascertain whether any other petitions have been presented against the debtor within the previous 18 months.
For those institutions carrying out building projects at the moment the recent news that the holding company of Currie & Brown was in administration at the time of its acquisition by Middle East-based consultant Dar Group raised fresh concerns that there may be more victims of this period of economic instability. The insolvency of a consultant can be as harmful to a project as that of the main contractor. Well-drafted documentation is essential to protect an employer, as is ensuring that all requests for payment are justified.
Landlords are often placed at a disadvantage when an insolvent tenant company enters into administration. The landlord will not be a secured or preferred creditor where its tenant does not pay the rent, and the landlord cannot forfeit the lease for non-payment of rent without permission of the court.
In Raithatha v Williamson [2012] EWHC 090 Ch, the English High Court was asked to decide whether a bankrupt’s entitlement to a pension, which he had not yet elected to receive, should be subject to an order for income payment.
FSA has made a statement explaining how the bank’s failure to comply with FSA’s liquidity guidelines as they applied to it was critical. It says that while the bank’s downfall was not directly due to the breaches, the breaches happened at a critical period for the financial markets and at a time FSA needed banks to keep it up to date on their liquidity. (Source: FSA Explains Liquidity Importance)
As noted in our July 2010 newsletter, lawyers are not immune from the recession.
FMLC has published an addendum to its March 2012 paper on legal uncertainties arising from bail-ins. The addendum addresses the points the Commission made in a recent paper. (Source: FMLC Bail-in Addendum)
In the English High Court case of Revenue and Customs Commissioners v Football League Ltd (Football Association Premier League Ltd intervening) [2012] EWHC 1372 (Ch); [2012] WLR (D) 163, HM Revenue and Customs (HMRC) brought a general challenge to the "football creditors rule".