Termination for insolvency: a clause for concern?

Perhaps influenced by the fall of some significant UK brands in recent years, the actions of suppliers of insolvent firms have long been on the radar of the Government, initially through the introduction of The Insolvency (Protection of Essential Supplies) Order 2015 and most recently through the consultation and consideration relating to the Corporate Insolvency and Governance Act 2020, which came into force on 26 June 2020.

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: