Hearn & Anor v Bell [2004] EWHC 2803 (Ch) (03 December 2004)

Hearn & Anor v Bell [2004] EWHC 2803 (Ch) (03 December 2004)

The trustee's decision to support the Plan and opt for the Alternate Payout treatment (£11m) is reasonable, based on expert actuarial and financial advice, provides certainty and maximises benefit coverage for pensioners and non-pensioners, and preserves legal rights if no English scheme/CVA is approved. The exercise of discretion is not open to challenge and directions sought are granted.

Citation
[2004] EWHC 2803 (Ch)
Parties
Claimant: Ann Hearn; Claimant: Champion Pensions Limited; Defendant: Barry Stephen Bell; Interested Party: Administrators (of FMI)
Jurisdiction
England and Wales
Judgment Date
03 December 2004
Procedural Posture
Application for Directions / Judgment on Trustee Application for Directions Regarding Voting and Treatment Under US Bankruptcy Reorganisation Plan
Outcome
Application granted; directions made.
Legal Topics
Trustee Discretion, Scheme of Arrangement, Chapter 11 Bankruptcy, Pension Scheme Funding, Distribution of Assets, Statutory Liability Under Pensions Act, Cross Jurisdictional Claims
Insolvency Pensions Trusts Cross Border Insolvency Trustee Discretion Scheme of Arrangement Chapter 11 Bankruptcy Pension Scheme Funding +3 more

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Parties

Ann Hearn

Claimant

Champion Pensions Limited

Claimant

Barry Stephen Bell

Defendant

Administrators (of FMI)

Interested Party

Procedural Posture

Application for Directions / Judgment on Trustee Application for Directions Regarding Voting and Treatment Under US Bankruptcy Reorganisation Plan

Legal Issues

  1. 1 Should trustees of Champion Pension Scheme vote in favour of the US bankruptcy reorganisation plan and accept the Alternate Payout treatment?
  2. 2 Is the exercise of trustee discretion in favour of the Alternate Payout reasonable and proper?
  3. 3 What are the comparative benefits of the Alternate Payout versus Let it Run and liquidation?

Ratio Decidendi

The trustee's decision to support the Plan and opt for the Alternate Payout treatment (£11m) is reasonable, based on expert actuarial and financial advice, provides certainty and maximises benefit coverage for pensioners and non-pensioners, and preserves legal rights if no English scheme/CVA is approved. The exercise of discretion is not open to challenge and directions sought are granted.

Court Disposition

Application granted; directions made.

Orders

  • Trustees authorised to vote in favour of the Plan and give undertakings to support a scheme/CVA for FMI.
  • Trustees authorised to accept the Alternate Payout treatment (£11m) under section 3.7.3(b) of the Plan.