If you are owed a lot of money by a company that just will not pay, this article covers one route that you might like to think about taking…
One of your options might be for you to enforce a judgment against the debtor directors’ own pension pot(s). And doing so just got easier following a recent judgement in the courts…
If the debtor is a company director who has breached their fiduciary duties, consider what happened in the case of Manolete v White. In this case, the High Court ruled in favour of the creditor, an insolvency litigation funder and the company’s creditors, who sought to compel the director to draw down their pension pot to satisfy an outstanding judgment debt of nearly £1 million.
The court applied the principles of Blight v Brewster, which established that debtors should not be allowed to hide assets in a pension fund that they have the right to withdraw and which are needed to pay creditors. And this principle can be applied to any kind of judgment debt, not just fraud cases. Since the legislative reforms in 2015, the entire pension pot is now vulnerable to enforcement by the courts, not just the tax-free lump sum.
Does an order to draw down the debtor’s pension pot breach the prohibition relating to occupational pensions in s.91(2) of the Pensions Act 1995? No, the court ruled in Manolete v White that this section did not present a bar to making a Blight v Brewster order, as long as the order did not restrain the person from receiving their pension. In this case, the court ordered the debtor to give written notice to the Scheme trustees asking for all of their remaining pension fund to be designated as a Drawdown Pension Fund and directed the payment to a nominated UK bank account in their name.
If your circumstances are similar to those in the Manolete case – you are owed a lot of money by a company whose directors have breached their duties – pop along to your local insolvency specialist, they will at least point you in the right direction, potentially saving you a lot of money.