This week the Court of Appeal has heard the long awaited appeal in Jervis and another v Pillar Denton Limited (Game Station) and others, better known as the Game Station case, which (depending on the outcome) may trigger a drastic change to the way in which rent in administration is treated.
In the recent decision of Topland Portfolio No.1 Limited v Smiths News Trading Limited [2014] EWCA Civ 18, the Court of Appeal has given a timely reminder of the need for landlords to tread carefully when dealing with leases to ensure that a tenant guarantee remains effective.
The Committee on Payment and Settlement Systems within Basel has published a report looking at how clearing and settlement arrangements for repos work and have worked during the economic crisis. It looks at issues that may affect resilience of repo markets and suggests ideas for strengthening them.
Treasury is consulting on implementation of the changes to the Settlement Finality Directive (SFD) and the Financial Collateral Directive (FCD) in the UK. The changes to the Directives cover:
Treasury has announced the next stage of withdrawal of government support for Northern Rock. It will end its guarantee on wholesale liabilities in three months' time, earlier than planned.
Parliament made a resolution calling on the Commission to adopt draft laws before the end of the year to help manage cross-border institutional crises. The measures should provide a common minimum set of rules, encourage convergence of national resolution and insolvency laws, and ultimately establish an EU resolution and insolvency regime. Parliament wants to see more crisis management powers to supervisory authorities, probably coordinated by the new European Banking Authority (EBA) (which takes over from CEBS).
FSA has censured a firm in voluntary liquidation for failings in selling and promoting geared traded endowment policies. Integrity Financial Solutions provided and advised on the policies. FSA found the product information it produced was misleading, which may have led IFAs to advise customers to buy an unsuitable product. It also found the firm’s own sales arm did not record information on customers and could not evidence why the product was suitable. FSA would have recommended a £350,000 fine if the firm were not in liquidation.
FSA made five sets of new rules at its March board meeting:
Treasury is consulting on how to improve protection and payment of benefits for policyholders of insurers who get into financial difficulty. Historically, few insurers have been put into administration or liquidation, and none have been so seriously affected in the recent crisis. So Treasury thinks it is time to review the regime and suggests changes that would:
In the event of a tenant becoming insolvent, it is clearly important for a landlord to know where rent payable ranks in administration. A recent landmark decision handed down by the High Court strengthens the position of landlords by deciding that rent can now be more widely payable as an expense of the administrator.
Background
Simply, if rent is ranked as an expense of the administration1 then it is almost always discharged in full as a mandatory expense of the administrator, rather than being placed with lower priority creditors.