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Company – Administration. The issue on appeal was the treatment of rent payable under a lease held by a corporate tenant that entered administration. The judge had held that part of an instalment of rent payable in advance could not be treated as an expense in the context of insolvency. The parties appealed. The Court of Appeal, Civil Division, in allowing the appeal, held that the salvage principle applied. Accordingly, the administrators had to make payments at the rate of the rent for the duration of any period which they retained possession of the demised property for the benefit of the administration.
Company – Administration. The issue on appeal was the treatment of rent payable under a lease held by a corporate tenant that entered administration. The judge had held that part of an instalment of rent payable in advance could not be treated as an expense in the context of insolvency. The parties appealed. The Court of Appeal, Civil Division, in allowing the appeal, held that the salvage principle applied. Accordingly, the administrators had to make payments at the rate of the rent for the duration of any period which they retained possession of the demised property for the benefit of the administration.
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