Advice in connection with insolvency and dilapidations

Alison Sparks and Guy Evans recently acted for the owner of a large motor works regarding tenant insolvency.

The client owns a site which is let to an operator. The premises were in a poor state of repair and the operator entered into members voluntary liquidation and their parent company began paying the rent.

Guy and Alison advised on the potential financial risks in the liquidation including the risk of the lease being disclaimed and the client being left with a significant bill for dilapidations and for an extended void period.

Guy and Alison also advised on the technical issues surrounding the liquidation and potential wrongdoing in connection with how the liquidation was commenced by the operator and how this may by used to put pressure on the parent company, as well as the risks of the parent company paying rent on behalf of the operator.

Guy and Alison worked collaboratively with the client’s surveyors to serve a Schedule of Dilapidations with over £500,000 of dilapidations excluding the consequential losses such as loss of rent. Guy and Alison advised on the ongoing negotiations surrounding the dilapidations and potential surrender of the lease and the negotiations with a prospective incoming tenant. The role covered a wide range of issues from technical insolvency issues to dilapidations to imply lease assignments and surrenders.