Can the landlord of a tenant that has gone into administration or liquidation claim preferential treatment, ahead of ordinary unsecured creditors, for the payment of rent?

In Goldacre (Offices) Ltd v Nortel Networks UK Ltd (in administration) it was held that, in the case of premises kept running by the administrators, all rent falling due after the date of the administration was payable ahead of ordinary unsecured creditors as “an expense of the administration”.

In the recent case of Schroder Exempt Property Unit Trust v Birmingham City Council, the High Court has confirmed that it is the landlord who is liable to pay business rates for an empty property following disclaimer of the lease by the tenant’s liquidator.

Under the Local Government Finance Act 1988, the person “entitled to possession of the property” is liable for rates.

The court held that, following disclaimer, the landlord had an immediate right to possession even though it had not actually taken possession of the property.

New legislation came in to force on 21 July 2014 with the intention of granting entry to the Pension Protection Fund (the “PPF”) for those members of the Olympic Airlines SA Pension and Life Assurance Scheme (the “Scheme”). The members of the Scheme had previously been denied entry as a result of a Court of Appeal decision in the case of the Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA.

In Credit and Mercantile Plc v (1) Kaymuu Ltd (2) Kevin Michael Wishart and (3) Ian Mark Defty (as Trustee in Bankruptcy for Mr Sami Muduroglu) [2014] EWHC 1746, the court held that whilst a beneficial interest was created in favour of Mr Wishart, it did not take priority to the claimant’s charge.

Background

According to press reports this week, the insolvency exception to the Jackson reforms will end next April, meaning that CFA success fees and ATE insurance premiums will no longer be recoverable in proceedings brought by liquidators, administrators, trustees in bankruptcy, or companies in liquidation or administration. Recoverability in all other claims was abolished from April 2013 (subject to exceptions for defamati

Key points

Agreements relating to costs in the course of their office could not be set aside by liquidators subsequently appointed.

The facts

The High Court of England and Wales handed down judgment last week in the case of Christine Mary Laverty and others as Joint Liquidators of PGL Realisations PLC and others v British Gas Trading Limited [2014] EWHC 2721.  In an important decision for the insolvency industry, it was held that the statutory deemed contracts regime for gas and electricity supply could not be used by utilities companies to gain priority over other creditors.

The High Court has rejected the argument that amounts owing to British Gas Trading Ltd (BGT) under post-administration, deemed contracts for the  provision of gas and electricity are automatically classed as expenses of the administration. The  court has reserved for consideration, however, whether and if so how an administrator’s conduct may  give the liability super priority or bring the salvage principle into play.

Background and preliminary issue

It has been understood since the Hindcastle case in 1997 that a guarantor’s payment obligations under a lease survive disclaimer by an insolvent tenant’s liquidator.  What has been less clear is how that works, given that the tenant’s obligation to pay rent dies when the lease is disclaimed.

The Pensions Regulator has announced, following several years of proceedings and court skirmishes, that a compromise has been reached in relation to the Financial Support Directions (FSDs) issued under the Lehman Brothers UK pension scheme.

FSDs and the Lehmans case – a reminder