Pensions Regulator may use powers to force acquirer to contribute to pension shortfall
The Financial Times reports on the acquisition of the senior debt of Brintons by Carlyle Group, with Brintons then immediately being put into a pre-pack administration and emerging under Carlyle’s control. No agreement was reached with Brintons pension scheme trustees, or with the Pensions Regulator or the Pension Protection Fund, as to how the liabilities of Brintons towards its pension scheme would be dealt with. A spokesman for the Pensions Regulator is quoted as saying:
“In this case, discussions involving the regulator and PPF never resulted in a realistic offer which treated the pension scheme fairly with regards to the position of other creditors.”
The Pensions Regulator has the power to require Carlyle to contribute to the pension scheme.
There have been similar acquisitions of the senior debt of troubled companies, followed by a pre-pack and emergence as a new company shorn of pension liabilities, this year – see these reports on the acquisition of Silentnight and of Polestar.
Friendly Corporate PSL
To subscribe for our free weekly update e-mail, click here.