On 21 June 2013, the Court of Appeal handed down its judgment in LB Re Financing No 1 Ltd & 36 Ors v Lehman Brothers Pension Scheme. It upheld the Upper Tribunal’s ruling against the Lehman Brothers firms fighting to be excluded from an Financial Support Directions (FSD) issued by TPR’s determinations panel (DP) against six other group companies. It found that:

  • the trustees were ‘directly affected parties’ as the determination concerned ‘the creation of a potential benefit that is conferred on them’; and
  • the two-year statutory time period for tPR to issue an FSD does not apply to directions given by the Tribunal regarding an FSD or to an order made on an appeal of those directions.

This means that the trustees are allowed to appeal the decision of the DP not to make an order adding the 38 Lehman group companies to the FSD to the Upper Tribunal. It also means that the Upper Tribunal was not time-barred from making such an order even though, if made, it would be made outside the two year time limit under the old FSD legislation.

We now await the Supreme Court’s ruling in the Nortel case on the ranking of liabilities under FSDs on a company’s administration or liquidation.