A landmark ruling has paved the way for companies to restructure without necessarily making their pension scheme ineligible for the Pension Protection Fund (PPF). Trustees in the case of L v M sought the court’s support (and that of the Pensions Regulator) for a plan to prevent the insolvency of the sponsoring employer which would result in an apportionment of the debt due to the scheme from the employers, the winding up of the scheme and would take the scheme into the PPF.

Several tort claims were made against T & N Limited (“the Insured”) arising out of its use of asbestos. As a consequence it became unlikely to be able to pay its debts. Administrators were appointed for the purposes of approving a scheme of arrangement under section 425 of the Companies Act 1985.

Several tort claims were made against T & N Limited (“the Insured”) arising out of its use of asbestos. As a consequence it became unlikely to be able to pay its debts. Administrators were appointed for the purposes of approving a scheme of arrangement under section 425 of the Companies Act 1985.

The Facts

This was an appeal by liquidators to the Court of Appeal from a decision refusing to grant an order that payments made to the respondent directors totalling nearly £450,000 were preferences.

By the time of the appeal, it was accepted that the payments were made within the relevant time and with the requisite intention to prefer.

Previous Decision

Facility agreements almost always contain events of default based on a borrower's insolvency. Defining insolvency is therefore key. In this article published in July 2013 we discussed how, following Eurosail¹ , the common law was beginning to move the statutory tests of insolvency towards a more commercial view.

On 25 May 2016, the Insolvency Service published a consultation paper aimed at reforming various aspects of the UK's corporate insolvency regime. It has now collected responses from various interested parties including Dentons. Some proposals focus on the issue of rescue finance, and how to make sure businesses have access to suitable finance to continue to trade out of financial difficulty or achieve a suitable restructuring.

In the recent judgment of Gorbunova v The Estate of Boris Berezovsky (deceased) and others¹ the High Court has provided useful guidance as to when summary judgment is appropriate in deciding whether a trust was established.

Focus on the AB InBev and SABMiller merger

In the recent case of BTI 2014 LLC v Sequana SA & others [2016] EWHC 1686, the High Court has held for the first time that a dividend can be challenged as a transaction entered into at an undervalue within the meaning of section 423(1) of the Insolvency Act 1986 (the “IA”).

The Facts

The facts of the case are long and complex but for present purposes the pertinent facts are as follows.

Arjo Wiggins Appleton Limited (now Windward Prospects Limited) (“AWA”) was a wholly owned subsidiary of Sequana SA (“SSA”).