Nortel case: Supreme Court ruling recognises key pensions remedies in insolvency cases

The UK Supreme Court has given judgment in the Nortel and Lehman Brothers pensions cases, ruling that pensions financial support directions (FSDs) and contribution notices (CNs) rank as provable debts in an insolvency. This ensures that these statutory provisions have effect when they are most needed.

The case began three years ago in the wake of the bankruptcies of both Nortel and Lehman Brothers, which each left behind a UK pension fund with a substantial deficit. In each case, the relevant employer company could not meet that deficit, and the question for the courts was whether statutory pensions remedies — FSDs and CNs — could be used to require other companies within each group to help make good the deficit. Those other group companies were themselves insolvent, but did have assets available to make some payment on creditor claims.

The Supreme Court’s decision has now confirmed that FSDs and CNs, which are issued under the Pensions Act 2004, effectively rank as provable debts alongside other general creditors if issued against insolvent target companies. The court ruled that FSD and CN liabilities are not administration or liquidation expenses that would rank ahead of general creditors, but nor do they rank behind general creditors such that they would be unlikely ever to be paid (the option that had become known as the ‘black hole’)…

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

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Hogan Lovells

View more briefings from Hogan Lovells

Analysis from The Lawyer

View more analysis from The Lawyer


Atlantic House
Holborn Viaduct

Turnover (£m): 1,098.00
No. of lawyers: 2,313 (UK 200)
Jurisdiction: UK
No. of offices: 8
No. of qualified lawyers: 219 (International 50)
No. of partners: 56