Court of Appeal upholds decision on pension liabilities as administration expense
The Court of Appeal has upheld the decision of the High Court concerning the ranking of certain pension liabilities in the administrations of the Nortel and Lehman group companies. It held that a liability under a contribution notice issued to enforce a financial support direction made after a company enters administration is not a provable debt but is an administration expense. The decision means that such amounts will have priority over amounts owing to floating charge holders and unsecured creditors.
This is an important decision for secured and unsecured creditors, insolvency officeholders and the Pensions Regulator, the PPF and pension scheme trustees. We have prepared a client briefing looking at the issues raised in this case which you can read here.