UK - The Pension Regulator (TPR) is facing a legal challenge from Lehman Brothers and Nortel Group over two Financial Support Directions (FSD) totalling £2.3bn.

The case, which will be heard in London's High Court in November, is seeking to address how administrators have to view any demands made by the regulator.

A statement issued by Nortel UK pension scheme said: "Over the past few weeks, it has become evident lawyers acting on behalf of the administrators […] have become concerned UK insolvency law is unclear about how administrators should treat an FSD - or a subsequent Contribution Notice (CN) - in terms of its 'ranking' in respect of all claims made by creditors against such EMEA entities."

It added: "Administrators have now asked the companies' court to rule on how an FSD/CN should be treated under insolvency law."

The statement said further that, because the administrators of Lehman Brothers were seeking to have identical matters addressed, the court had ordered the cases to be held together.

Peter Murphy, partner of the dispute resolution unit at Sacker & Partners, said: "Ultimately, the pension scheme, regardless of the FSD, is not a secured creditor or a preferred creditor in any way - the FSD doesn't affect the priority."

He added that the FSD, which in Nortel's case was issued against its subsidiaries in the US, Canada, Europe, as well as the UK, would make companies that had no direct relation to the pension scheme be "on the hook".

The sponsor for the Nortel's UK scheme was Nortel Networks UK, which went into administration in 2009, leaving behind a £2.1bn pension deficit.

TPR argued Nortel and its international subsidiaries benefited from NNUK not making sufficient contributions to the scheme, which led to the overseas bodies' inclusion in the direction.

However, court cases in the US and Canada have since ruled the note null and void in the countries' insolvency processes.

Lehman Brothers was issued with an FSD earlier this month, seeking to make up an estimated £100m shortfall in its UK scheme.