The judgment in Re Virgin Active Holdings Limited  EWHC 1246 has empowered the use of restructuring plans under Part 26A to the Companies Act 2006 (‘RPs’) to compromise the rights of unsecured creditors based on evidence that they would receive little or no return on an insolvency.
This is potentially significant for defined benefit pension schemes. In this article published in the International Corporate Rescue Journal, Samantha Brown, John Whiteoak and Phillip Lis consider how this may affect the role of scheme trustees and other stakeholders in restructurings and the hurdles and potential risks to companies considering compromising pension liabilities without trustee consent.
This article first appeared in Volume 18, Issue 4 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2021