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Pension priority in bankruptcies

Saturday 15 October 2011 00:00 BST
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The Court of Appeal has ruled bankrupt companies must fill their pension gaps before paying other unsecured debts, upholding an earlier ruling against the administrators for Lehman Brothers and Nortel Networks.

The court upheld a High Court ruling last year that pension funds were an expense and must be paid before debts to administrators. The ruling prompted warnings it could hit the chances of business rescues, though experts said the judgment would only apply in specific circumstances, where the Pension Regulator is involved.

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