News

Regulator's decision not to issue financial support directions may be appealed in relation to Lehman Brothers Pension Scheme

A tribunal has ruled that six subsidiaries of Lehman Brothers and the pension scheme trustees are entitled to appeal the Pension Regulator’s decision not to impose a financial support direction (“FSD”) on 38 other group companies.

They were entitled to bring an appeal as they were “directly affected” by the decision, having “a clear, direct and personal interest in the outcome of any determination as to whether the powers would be exercised”. The judges also decided that the Regulator’s two year time limit for issuing an FSD against the companies only applied to its own administration process and did not apply in this case.

This decision has given back to the Regulator powers it had previously decided not to exercise. We shall have to wait and see how enthusiastic the Regulator is about pursing these targets second time around. The Supreme Court is due to decide whether FSDs enjoy super priority over creditors, some time next year. That decision will, no doubt, influence the practical steps the Regulator goes on to take.