Members of the Nortel Networks UK Pension Scheme are due to receive more than £1bn after a settlement was agreed in a long-running court battle across two continents.
The feud was triggered in 2009 when the US telecommunications company went bust, leading to a vast array of creditors to fight over around $7.3bn (£5.6bn) of residual assets in British, American and Canadian courts.
However, an informal agreement was reached in October last year to distribute "the lockbox" across all creditors on a pro-rata basis, and American and Canadian judges last week jointly ratified the settlement with creditor support.
More than £1bn is now expected to be given to the 40% funded 33,000 member scheme by the end of 2018, bringing a close to what has been described by the courts as "scorched earth litigation".
The battle saw representatives from The Pensions Regulator (TPR) and Pension Protection Fund (PPF) head across the Atlantic to make the case with the trustees.
Chair of the trustee David Davies said the settlement will be greatly welcomed by "anxious" scheme members.
"The trustee is absolutely delighted," he said. "It has fought a long and brave battle to get to this point, and is now weeks away from receiving the first tranche of a total recover estimated at in excess of £1bn for the members of the Nortel UK Pension Scheme.
"These former employees of Nortel UK helped created the worldwide wealth of the telecoms giant, but when Nortel collapsed in 2009 they were left with a huge hole in their pension fund. They have waited a long and anxious time for the end of this battle."
Davies added the board would now use the funds to buyout as much of the scheme as possible in order to ensure members received benefits above the PPF level.
Hogan Lovells head of pensions litigation Angela Dimsdale Gill, who advised the trustees, said the case will provide a way for UK pension schemes to access funds from overseas insolvent firms.
"What this case says is that in circumstances of this kind the courts might take this as a precedent and say all creditor claims, where you have a truly transnational company, should be dealt with on a pro-rata basis," she said. "The pension creditors in one jurisdiction will not be limited by the measures available to them in that jurisdiction.
"When you have a truly transnational company, where members have contributed to its wealth across the world, they should share with all the pooled funds across the world and not be limited to what's left in the UK company."
A spokesperson for TPR said it believed its approach to the case was right despite a Canadian court rejecting a financial support direction it was going to issue.
"We welcome this outcome for the UK pension scheme which is an important step on the road to this case being resolved," they said. "We believe our decision to pursue financial support directions was an important aspect in this settlement being reached and gave added weight to the pension scheme's claims in the insolvency processes.
"The outcome has been delayed as a result of several long and very complex litigation cases in North America, but we were determined to remain fully engaged throughout, demonstrating that we will not waiver in our role to protect member outcomes."
The case has been a significant test of the ability of UK pension schemes to reclaim assets from parent companies based abroad, as well as TPR's jurisdiction across borders.
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