[2008] EWHC 1099 (Ch)

The High Court has ruled that calculations of employer debt by scheme actuaries cannot be challenged by insolvency practitioners unless there is evidence of fraud or error.

The credit crunch is biting ... your scheme's sponsoring employer is facing insolvency ... what can the trustees and advisors do before the insolvency to lay the foundations for a smooth Pension Protection Fund (PPF) assessment period?

What is a PPF assessment period?

Many local authorities are involved in large and expensive projects. It is often the case that costs and timetables for projects will be tight. Therefore any problems that arise on site or with the contractor will have serious consequences for the local authority and its ability to complete the project on time and on budget.

One of the worst headaches a local authority can face during a project is the main building contractor becoming insolvent during the course of a construction project.

Two documents on winding up procedures have recently been released for consultation. The first is a joint statement by the Pensions Regulator, the Pension Protection Fund and the DWP in respect of the Financial Assistance Scheme on the regulation of schemes in wind up and in a PPF assessment period. The second is a set of good practice guidelines from the Pensions Regulator on avoiding delays in the winding up of schemes.

It is clear from the recent collapse of Bear Stearns that the real impact of the credit crunch is now being felt. With this in mind, how can landlords and tenants of commercial properties prepare themselves for a potential rise in the number of corporate insolvencies?

Landlords’ remedies – think outside the box

The landlord of a commercial property faced with an insolvent tenant will usually have two concerns:

In Masri v Consolidated Contractors International Company SAL and another – Butterworths Law Direct 4.4.08 the principal issues on the appeal were whether the Commercial Court had international jurisdiction to make an order for the appointment of a receiver by way of equitable execution, and a freezing order, and whether a receivership order could be made by way of equitable execution in relation to future debts.

The European High Yield Association's proposals for reforming the UK insolvency laws risk pushing the UK towards the US litigation-heavy model says Reynolds Porter Chamberlain LLP, the City law firm.

In proposals submitted to HM Treasury, the trade body for the high yield debt industry called for a "court supervised restructuring process" where:

The English Court has ordered that meetings be convened on 4 July 2008 for creditors to vote on the solvent schemes of arrangement being proposed by 82 members of the E W Payne Pools. The E W Payne Pools have been in run-off for over 20 years and, it is predicted, that the run-off could last, if not for the proposed schemes, for at least another 20 years. The purpose of the schemes is to bring that run-off to an early close. The schemes establish a method for the valuation and payment of cedants' current and future claims against the Pools.

When a person is unable to pursue a claim against someone who has been made bankrupt on account of the bankruptcy having been discharged, it may still be possible to pursue the claim against the bankrupt’s insurers, following a recent ruling.

The case involved 12 claims for breach of trust against nine solicitors and a Mr Dixit Shah. It was brought by the Law Society and 19 of the various clients of the solicitors.

Secured creditors with an unsecured shortfall cannot claim a share of the prescribed part of the floating charge realisations set aside for unsecured creditors under Section 176A of the Insolvency Act 1986. This applies whether the secured creditor is the holder of a fixed or a floating charge (or both).