US/UK - The trustee of the Visteon UK Pension Plan and the Pension Protection Fund are withdrawing a US$550m (£350m) claim against Visteon Corporation.
In a letter - received by members today, and seen by GP's sister title Professional Pensions - the trustee said it had decided not to pursue the claim further and had instructed its US lawyers to start the process for withdrawing the claim.
It said the PPF has also concluded that it will withdraw its claim.
The trustee said it had concluded the costs and risks of pursuing litigation outweighed the likely benefits - and such action was therefore no longer likely to be in members' best interests.
The trustee also said its claim depended on the regulator being able to exercise its "moral hazard" powers to seek a recovery of funds from Visteon.
However it said the regulator had informed the trustee that based on its investigations and the evidence available to it, it did not consider it would be appropriate to commence regulatory action against Visteon and the other US companies included in the Chapter 11 proceedings.
A TPR spokesman said: "The Pensions Regulator continues to investigate whether there may be a case for using its powers against other target companies that could have a responsibility to support the Visteon UK pension scheme."
This comes after the trustee and the PPF had filed claims in Visteon Corporation's insolvency, or chapter 11, proceedings, with the purpose of seeking to recover funds from Visteon Corporation and other Visteon Companies to improve the scheme's funding position.
In early April this year, Visteon Corporation, together with the other Visteon Companies named on the Trustee's claim, filed an objection to the trustee's claim (Global Pensions; April 14, 2010).
This objection in the US bankruptcy court challenged the merits of the trustee's claim and the ability of the regulator to exercise its moral hazard powers in this particular case.
Visteon's objection also asked the court to reject the trustee's claim.
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