Administrator’s Duties During a Trading Administration?
In general terms, administration is designed to offer a temporary shield against creditor pressure. As such, administrators have no liability to pay debts, including rent in arrears, unless compelled by the court. Debts or expenses which arise during the process itself, however, are a different matter. When the administrators have opted to use a company premises for their benefit, then this rent is payable as an expense.
Using part of the Premises
In a situation, whereby the administrator only requires a portion of the business premises, something of a legal grey area emerges. In the case, Goldacre (Offices) Ltd v Nortel Networks UK (2009) EWHC the court ruled that if the administrators are using any part of the property the rent should be fully settled on the due dates specified in the lease.
It is an administrator’s responsibility to assess, then the first few days of his/her appointment what properties are rented by the company. He can then make a clear decision which properties may be useful and which can be handed back to the relevant landlords, along with a surrender of the lease.
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