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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

01 MAY 2012

Rent and Administration Expenses Revisited

Simon Passfield, Guildhall Chambers

1.       The decision in Goldacre (Offices) Ltd v Nortel Networks (UK) Ltd [2009] EWHC 3389 (Ch), [2010] Ch 455, in which His Honour Judge Purle QC concluded that the Lundy Granite principle applied equally to administration as it does to liquidation, with the effect that rent payable in advance that falls due for payment while a lease is retained by an administrator is payable in full as an administration expense without apportionment (notwithstanding the subsequent vacation of the premises during the relevant period) has resulted in a morass of critical commentary, both favourable and otherwise.

2.       The extent and implications of that case has been given further judicial consideration in the recent decision of His Honour Judge Pelling QC in Leisure (Norwich) II Ltd v Luminar Lava Ignite Ltd [2012] EWHC 951 (Ch). It should be noted that whilst this article considers the application of the relevant principles in administration, they apply equally in liquidation.

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