Lamport Bassitt Solicitors - Legal News - High Court judgment affects corporate insolvency rules


	LATEST LATEST LEGAL NEWS ARCHIVE		LATEST NEWS & EVENTS High Court judgment affects corporate insolvency rules A High Court judgment means that where a Financial Support Direction (FSD) is issued against a firm after corporate insolvency, the cost of complying with that direction is an expense in the insolvency and therefore takes precedence over unsecured creditors. The ruling was given in the case brought by trustees of pension schemes of Nortel and Lehman Brothers. Welcoming the news, the UK Pensions Regulator noted that the ruling confirms that an FSD is valid if issued after insolvency. "This ruling clarifies the effect of an FSD on an insolvent target. However, it will not alter the regulator's approach to determining FSDs in any situation," the regulator said. Rick Munro, partner at Lamport Bassitt, noted the decision could be an impediment to the achievement of the objectives of the rescue culture. He said: "Promoting pension debts to super-priority status after the commencement of insolvency means that returns to preferential and unsecured creditors could be wiped out." Posted by Gaby Hamerton Related Articles: 8/5/2012 - More companies fail as personal insolvencies fall 23/4/2012 - Landlords and insurers unite behind insolvency law reform 19/4/2012 - Enterprise Act 'does not need radical overhaul' 13/4/2012 - Retail insolvency rate up 15% as rent payments bite 28/3/2012 - Business insolvencies on the rise More Insolvency & Restructuring News