Rent in administration

* * * * * *

Here is a recurring theme of the current recession. A landlord has let some premises to a tenant. The tenant is overburdened with debt, but nevertheless it has a sound underlying business. The simple solution? It puts itself into administration, and the administrator then sells the business to a new company formed for that purpose by the outgoing management team. The business carries on just as before, but now it is free of its debts. The creditors, on the other hand, are left to claw back the debt out of a share of the proceeds got in by the administrator from the sale of the business. Most of the debt will, of course, have to be written off. But where does the landlord fit into this unhappy picture?

What the landlord will almost certainly find is that the premises are now being occupied, not by the old company,