At last a good use for corporate poison pills. Provisions introduced to protect WH Smith's pension funds from corporate raiders attempting to use it to finance a takeover have made liabilities to it effectively senior debt. So even though they don't appear on the balance sheet, VC's have had to treat them as if they did.
In general this is not the case and the sad pattern is: Company runs into trouble, doesn't pay its pension contributions, company goes bust with pension fund in deficit, Existing pensioners get first claim on remaining assets, unretired pensioners get nothing.
There is no law to make it this way but the FT suggests poison pills were quite popular in the eighties s some pensioners may be better protected than they, or rather I, thought.
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