Michael Pointer says Landau raises many new questions

Although the case of Re: Ivan aubrey Landau 967/96 clearly resolves one question it also raises many other far-reaching issues.

For example, cases will need to be kept open for more than 20 years; distributions will probably be made only every year or two; and contact with creditors may be a long-term problem.

Where cases have been reopened, a trustee could proceed against the debtor to receive past tax-free lump sums and annuities.

In some cases, the debtor will have continued making contributions since bankruptcy and will expect to be able to retire with pension benefits. Will insurers have to allocate the maturity value pre- and post-bankruptcy between the trustee and the debtor, respectively?

Trustees should immediately review the files of existing bankrupts and of closed post-1986 cases in order to establish whether a pension policy exists.

A debtor nearing or actually in retirement will find it difficult to devise an individual voluntary arrangement (IVA) which will give a better return than bankruptcy. Older debtors may find that much better proposals must be offered to avoid bankruptcy.

Conversely, the desire for an IVA will increase for most debtors and one can expect some creative ideas to produce finds at an early date in return for retaining the pension.

Debtors may vary pension policies - for example, should the debtor die during the term of the IVA, the proceeds would be used for the creditors' benefit.

Supervisors will have to consider the Landau decision's effect on existing IVAs. Are pension policies an asset if not specifically excluded at the outset?

The Pensions Act 1995 protects the benefits of an occupational scheme from a trustee in bankruptcy from April 1997. For bankruptcies before that date, would rights under these schemes also be a chose in action which vest in the trustee? The issue is still to be resolved, but the Landau principle could well apply.

Many companies have forfeiture clauses which are designed to shield pension funds from creditors. Mr Justice Ferris' clear statement that such attempts at protective trusts are a fraud on the bankruptcy laws puts matters in an entirely new light.

I believe the case determines that, for personal pensions at least, these clauses are entirely non-effective.