Payment of rent as an administration expense

Landlords will welcome the decision in a case concerning the administration of the Game group of companies. The Court of Appeal held that an administrator or liquidator must pay the rent arising in respect of property leased by the insolvent company, for any period during which the administrator or liquidator retains possession of the premises for the benefit of the administration or liquidation as an expense of the insolvency process.

Generally, the insolvency office holders will settle all claims that rank as an expense in full. Although this case concerned an administration, the court was clear that the same principles would apply in liquidation.