Sea Containers gains approval for its financial arrangement to support two pension schemes

The Pensions Regulator has approved the financial support arrangements of Sea Containers Limited (SCL) for two of its UK group pension schemes.

The two schemes are the Sea Containers 1983 Pension Scheme and the Sea Containers 1990 Pension Scheme.
The arrangements formed part of an innovative plan to exit SCL’s Chapter 11 proceedings.

Under the Plan, SCL transferred its interest in its container leasing business, including its joint venture with GE Capital Corporation, GE SeaCo, to a new company owned by its creditors, including the pension schemes.

Sacker & Partners LLP, the pension law firm, advised the trustees of the larger 1983 scheme with US attorneys acting alongside them.

The first ever financial support direction (FSD) made by The Pensions Regulator was imposed on SCL after a contested hearing in June 2007.

The arrangements proposed by SCL to satisfy the FSD were unsuccessfully challenged in the US Bankruptcy Court by other creditors.

Nick Couldrey, partner at Sackers, said: “The Pensions Regulator has approved the settlement and it is effective. The trustees now have a substantial holding in a new company in satisfaction of their claims. Today’s approval completes what has been a long campaign by the trustees to defend the rights of pension scheme members.

“It has taken more than two years to enforce those rights in three jurisdictions, which involved two contested actions. The support of The Pensions Regulator has been an essential element in securing this successful outcome.”

See previous report on 16 June 2007: Pensions regulator uses anti-avoidance powers on Sea Containers