Nortel and Lehman Brothers case on FSDs decided — a workable way forward

By Heather Chandler

The case involved two groups (the Nortel group and the Lehman group) each of which contained occupational pension schemes with substantial funding deficits.

The Pensions Regulator (PR) had issued financial support directions (FSDs) to the group companies, in both cases following the placement of the group into administration. An FSD is a direction from the PR where the employer supporting a scheme is either a service company or insufficiently resourced, requiring another person(s) to connect with that employer to make financial arrangements to support the scheme.

The question to the court was whether the costs of complying with the FSDs (and any subsequent contribution notice) constitute a provable debt or an expense of the insolvency, or are not recoverable at all. Where an FSD is issued before insolvency, it was common ground the liabilities under it would constitute a provable debt in the recipient’s subsequent insolvency…

If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.

Briefings from Shoosmiths

View more briefings from Shoosmiths

Analysis from The Lawyer

  • Hester: declined bonus worth almost £1m

    Pay checks

    Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future

  • high street 150

    Focus: Alternative business structures - Law and new order

    There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…

Overview

2 Colmore Square
38 Colmore Circus Queensway
Birmingham
B4 6BJ
UK
http://www.shoosmiths.co.uk

Turnover (£m): 87.00
No. of Lawyers: 373