Supreme Court Holds That the Pensions Regulator’s Moral Hazard Powers are a Provable Debt in an Insolvency

    View Authors July 2013
    Today’s decision of the Supreme Court to hold that a financial support direction (“FSD”) or a contribution notice (“CN”) issued to a target after the commencement of its insolvency process is a provable debt, rather than being paid out of floating charge realisations as an administration expense in priority to the administrators’ costs and preferential and unsecured creditors, is great news for lenders and Insolvency Practitioners alike. It means the FSD or CN will rank with other unsecured creditors. This decision represents closure of an issue which has been troubling lenders, Insolvency Practitioners, plan trustees and the Pensions Regulator since 2009.