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Insolvency of landlord

Application for new lease

Landlord in administration

Somerfield Stores Limited v Spring (Sutton Coldfield) Limited
[2009] EWHC 2384 (Ch)

Summary

An application by a tenant for a new lease under Part II of the 1954 Act is a "legal process" within paragraph 43, Schedule B1, Insolvency Act 1986. This means that if the landlord goes into administration the tenant cannot proceed with the claim without the consent of the administrator or the permission of the court. In this case the tenant was given permission to pursue a claim for a new tenancy where the landlord had objected on ground s30(1)(f). (For applications under para 43 generally see the Insolvency page).

Facts

When the landlord went into administration, the administrator refused to consent to the claim. It wanted to explore the possibility of a scheme that would allow it to redevelop and thereby increase the sums available for the creditors – principally a bank with a charge over the landlord's property. The tenant therefore applied to the court for permission to continue with the claim.

Held

The court gave permission for the claim to continue. The court applied the principles in Atlantic Computer Systems [1992] Ch, 505. In striking a balance between the rights of the administrators to conduct an orderly administration in accordan ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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