Mr White Gets The Same Treatment As Mr Green: Director Ordered To Draw Pension Sums To Pay Creditors

• Jurisdiction: European Union
• Published date: 19 October 2023
• Subject Matter: Finance and Banking, Employment and HR, Retirement, Superannuation & Pensions, Fund Finance
• Law Firm: Burges Salmon
• Author: Mr Justin Briggs
• topic: Bankruptcy and Insolvency,Trust Law,Corporate / Commercial,Civil Procedure

Summary

The recent judgment handed down by the High Court in Manolete v White [2023] EWHC 567 (Ch) reinforces the Court's power to order a judgment debtor to exercise a right to draw down on their pension for the benefit of creditors as recently seen in Bacci v Green.

The Facts

For over a decade, Ian White served as a of Lloyds British Testing Limited before it became insolvent, and Liquidators were appointed. The Liquidators, PwC, estimated creditors were owed over '3,306,000. After investigating the company's affairs, the Liquidators sued Mr White for breach of fiduciary duty to the Company by causing it to make payments towards luxury cars and holidays before it collapsed. The Liquidators' claims were successful, and judgment was awarded against Mr White for just under '1 million. Mr White failed to satisfy the judgment or make any contribution toward it. Knowing that Mr White had benefitted handsomely from the Company pension scheme, the Liquidators pursued him in relation to his substantial pension entitlement.

The property, valued at '800,000, was the only substantial asset of the Scheme and, via a lease, it generated an income of '60,000 per annum. As sole beneficiary of the Scheme, Mr White was entitled to a residual pension after a pension commencement lump sum, funded from the '60,000 annual income from the property.

To avoid the injustice of the Company's creditors not being paid whilst Mr White enjoyed a generous pension, the Liquidators sought an order under Section 37(1) of the Senior Courts Act 1981 requiring Mr White to delegate authority to the Liquidator's solicitor to...