Accountancy firm Moore Stevens was appointed as administrators to RDA last week (17 February), under advice from BLP partners Ben Larkin and Norman Russell. Larkin and Russell had advised RDA in the run-up to its administration.
A team from Kirkland & Ellis, including London partners Partha Kar and Kon Asimacopoulos, is advising RDA’s US parent, with Ashurst having been instructed by various lenders.
The survival of RDA had hinged on whether it could secure funding for the £125m deficit on its pension fund. The decision by the Pensions Regulator (TPR) not to sanction a funding deal struck between the scheme’s trustees and the Pension Protection Fund (PPF) has been seen as the catalyst for RDA going into administration.
The deal would have included a £10.9m payment into the pension fund by RDA’s US parent, which filed for voluntary bankruptcy six months ago, along with the transfer of one-third of the UK business’s equity to the scheme. The scheme would then have transferred to the PPF.
However, TPR pulled the plug on the deal at the last minute in a change of direction that pensions lawyers are describing as unprecedented.
“It’s still not entirely clear why,” said one lawyer familiar with the matter.
Sackers senior partner Ian Pittaway said it was usually hard to split TPR and the PPF in negotiations.
“It’s highly unusual for them to take different views,” Pittaway added. “Perhaps there are some unique circumstances.”
Another pensions specialist, Lovells partner Claire Southern, echoed Pittaway.
“The fact that the regulator walked away from the deal suggests that it thought it didn’t offer good value,” said Southern. “It may be looking to play hardball and flex its statutory muscles against the overseas parent.”
In a statement the regulator said: “We’d hoped that an alternative solution could be found for the pension fund, but this was not possible. The regulator is now considering its next steps, including use of its powers.”