Sealing Administration Expenses, Puncturing Rescue Culture?
Insolvency Law & Practice, Vol. 23, 2007
19 Pages Posted: 23 Apr 2007
The recent decision in Exeter City Council v Bairstow (Re Trident Fashions  EWHC 400 (Ch) (02 March 2007) confirms the correct approach to insolvency expenses: what constitutes an insolvency expense is purely a matter of statutory construction, a process enlightened by the Lundy Granite principle in respect of certain pre-insolvency claims such as rent.
The much touted 'expenses principle' enunciated in Re Atlantic Computer Systems  Ch 505 is unsustainable.
Non-domestic business rates are payable as administration expenses under rule 2.67 of the Insolvency Rules 1986. However, this might render rescue more difficult to achieve in some cases. Legislative reconsideration is called for.
Keywords: Administration expense, insolvency expense, liquidation expense, rates, rescue culture
JEL Classification: K10, K11, K20, K29, K30, K39
Suggested Citation: Suggested Citation