As the prospects for business survival become ever tougher due to challenging economic conditions, administrators and liquidators are increasingly finding themselves having to justify to the courts whether or not costs should be treated as an expense of the administration or liquidation.

Sums incurred or paid as an expense of an administration or liquidation are, unlike debts incurred before the appointment of the administrator or liquidator, paid in preference to unsecured debts and also before the administrator or liquidator's fees and expenses.

In this note we look at recent case law - in particular the case of MK Airlines Property Limited (in administration) and whether the fact that an administrator or liquidator is occupying premises automatically means rent will be due to the landlord as an expense of the administration or liquidation. 

Read the full article at lexology.com.