Insolvency

The UK arm of Toys R Us has entered administration just two months after a major restructuring deal was agreed with creditors including the Pension Protection Fund (PPF) to prevent the company going bust.

As the government considers reviewing where schemes rank in insolvencies, James Phillips explores how likely it is for schemes to be able to recover debts and if change is needed.

The Work and Pensions Committee (WPC) and the Business, Energy and Industrial Strategy Committee (BEISC) will hold two sessions to probe why Carillion went into liquidation.

The government has indicated it may change the order in which debts are recovered during an insolvency, putting pension schemes higher up the hierarchy.

Carillion's 13 UK defined benefit (DB) schemes were added to the Pension Protection Fund's (PPF) watch list by autumn last year, the Financial Times reports.

Richard Favier says extending the 12-month period would result in a lot of companies seeking to pass their pension debts to the PPF

Toys R Us may have to pay around £9m into its defined benefit (DB) scheme so its restructuring deal can be agreed by the Pension Protection Fund (PPF), according to reports.

Two-thirds of the industry believe The Pensions Regulator (TPR) should look at the immediate insolvency of a company when considering whether to approve a restructure involving a pension scheme.

There are increasing concerns pre-pack administrations are being exploited to dump pension schemes into the PPF. Stephanie Baxter explores whether there is systemic misuse and if the regime is ripe for reform

The Pension Protection Fund (PPF) has published its latest restructuring principles and guidance for insolvency professionals.