Game-changing result for the real-estate sector in the Court of Appeal — 24 February 2014
Landlords have won their appeal, in the case surrounding the Game administration, to claim unpaid rent for a period that a company is in administration and trading from a property as an expense of the administration (as opposed to merely a provable debt), irrespective of when the due date for rent payment occurs.
Two high court decisions (Goldacre and Luminar) had decided that where rent is payable in advance and an administrator/liquidator is appointed:
- If the relevant quarter payment day fell prior to the appointment, then none of that quarter’s rent could be an expense of the administration/winding-up during that quarter, even if the property was used for the purposes of the administration/winding-up during that period. This left that quarter’s rent to rank as a provable debt alongside other unsecured creditors.
- If the relevant quarter payment day fell after the appointment, then the whole quarter’s rent could be an expense of the administration/winding-up, even where it was not used for the purposes of the administration/winding-up for the whole quarter…
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The past five years have not been easy for Addleshaw Goddard. The firm’s revenue fell 7 per cent from £173.1m to £161.9m between 2008/09 and 2010/11 and despite finances looking up in 2011/12, when Addleshaws reported a 30 per cent increase in net profit, it has shown no notable compound growth in turnover since 2007/08.