Finally a conclusion to 16 year-long CVA

TXU UK Ltd (“the Company”) acquired the business of the former Eastern Electricity Board in 2001 and in 2002 it, along with 26 connected companies in the TXU Europe Group, went into administration, each with their own linked CVA.

The date by which claims in the CVA had to be lodged was March 2005, but the supervisors had discretion to admit later claims in certain circumstances. The supervisors applied in this instance to conclude the CVA, some 16 years later. The application was necessary because the company had a number of contingent creditors who potentially had claims for personal injury in relation to asbestos/mesothelioma and under the pension facility. The supervisors had commissioned reports that anticipated up to 10 further personal injury claims in the following 30 years.

In considering the application to conclude the CVA, the court agreed that leaving it open for an indefinite period was unattractive, not least because there was limited money within the administration that was decreasing ever further the longer the CVA dragged on. The supervisors had advertised the mesothelioma claims far and wide but had received only a handful of actual claims. 

The court held that the existence of contingent claims was no bar to the obligation on officeholders to complete their task as soon as reasonably practicable (Re Danka Business Systems Plc [in liquidation]). It was clear there was no special prejudice to those contingent creditors in allowing the CVA to conclude and in fact there would be a benefit in that there would be a final distribution.

Re TXU UK Ltd