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Landlord wins as CVA term not a penalty

Following the liquidation of BHS Ltd, the High Court was asked to consider whether a landlord could claim full rent as an administration expense following termination of the CVA.

Background

Wright and another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd concerned three principal insolvency processes applicable to companies under the Insolvency Act 1986:

United Kingdom, Insolvency & Restructuring, Litigation, Real Estate, Shoosmiths LLP, Liquidation
U.S. Supreme Court clarifies that Chapter 13 debtors may not deduct car ownership expenses when they make no loan or lease payments

In Ransom v. FIA Card Servs., N.A., --- S.Ct. ----, 2011 WL 66438 (U.S. 2011), the United States Supreme Court took up the question of whether a Chapter 13 debtor who owns his or her vehicle outright (“free and clear”) may claim an allowance for car ownership costs and thereby reduce the amount that he or she will repay creditors. In her first opinion, Justice Kagan answered simply—no. The Ransom opinion has been seen as a victory for not only credit card companies like the one involved but other creditors, as well.

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Costs in English law, Debtor, Unsecured debt, Debt, Tax deduction, Internal Revenue Service (USA), Supreme Court of the United States, Ninth Circuit, Bankruptcy Appellate Panel