Fair Game — administration rents and creditors’ returns
In recent years, some high-profile (and controversial) court decisions have swelled the list of liabilities that must be paid as expenses of an administration. Administration expenses enjoy ‘super priority’, being payable out of floating charge realisations ahead of the claims of preferential creditors and floating charge holders. So when an otherwise unsecured claim ranks as an administration expense, it clearly benefits the relevant creditor, but at the expense of the floating charge holder. It can also consume valuable resources that could otherwise be available to trade an ailing business.
Recently, though, the tide has been turning. In July last year, the Supreme Court held that financial support directions, or contribution notices, issued to a company by the Pensions Regulator will rank as a ‘provable debt’ of a company, and not as an expense of the administration.
Now, in the context of the administration of the Game group of companies, the Court of Appeal has revisited the rules on payment of rent as an administration expense. It has ruled that administrators should pay rent as an administration expense pro rata for the period that they use a property for the benefit of the administration. This is regardless of when the relevant rent payment day falls or whether the rent is payable in arrears or in advance…
Click on the link below to read the rest of the Dentons briefing.
News from Dentons
News from The Lawyer
Briefings from Dentons
A British Columbia judge has considered an employer’s concerns for the safety of replacement workers, in granting an injunction against picketing workers.
Is the PPF levy for your scheme fair? Does it reflect the true risk of the scheme ever becoming a burden to the PPF?
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
The continent’s boom in natural resources and renewable energy is sparking an infrastructure drive