Aer Lingus trustees 'must be told of capital reserve payout'
THE High Court has ruled the trustees of the Aer Lingus workers' pensions funds must be given prior notice of the proposed €500m distribution from Aer Lingus's capital reserves so as to pay dividends to shareholders.
It is then open to the trustees to bring a claim against the company, given the €930m deficit in the funds, and to seek injunctions restraining distribution of the €500m if that brings the reserves below the amount of the claim, Mr Justice Roderick Murphy directed.
He said Aer Lingus was not entitled to an unconditional order concerning the distribution, but the trustees' application for any distribution to be conditional on retaining sufficient reserves to address a claim also "poses a problem".
While he considered it "not possible at this point" to make an order precluding "the effect" of the reduction, he would impose a condition that no distribution of the reserves would be made without notice to the trustees, the judge said.
That gave them a right to make a claim, but there was no such claim as of now, he added.
He also directed that no distribution should be made without notice such as would reduce the reserves below the sums of the deficit. Those orders would enable the trustees to formulate a claim and seek such orders as they saw fit, he said.
Following that ruling, Paul Sreenan SC, for Aer Lingus, and Brian O'Moore SC, for the trustees, asked that the matter be adjourned to Friday.
The judge agreed to that adjournment.