Nortel judgment ends super priority for pension claims in insolvency

This briefing considers the Supreme Court’s decision in Nortel Companies & Ors, Re [2013] UKSC 52 (24 July 2013).

The Supreme Court held that the costs of complying with financial support directions issued by the Pensions Regulator against companies in administration are a provable debt, ranking equally with other unsecured, non-preferential debts. In so doing, it reversed the decision of the Court of Appeal which had elevated such liabilities to super-priority status by ranking them as an expense of the administration.