A landmark insolvency and property case has been underway this week in the Court of Appeal. The result of the Game Station Ltd (Jervis v Pillar Denton Ltd and others) (2013) case is expected to have widespread implications within the insolvency industry and the broader sectors concerned with the administration.
The case was prompted by the administration of gaming retailer GAME in March 2013, which led to the closure of approximately 300 stores and left millions of pounds worth of rent unpaid.
The resolution of the case is expected to lead to a change in the law regarding the labelling of rent as an administration expense. Currently, the law allows administrators to legally trade businesses in administration from their rented premises for as long as three months.
However, the final decision regarding the case could lead to the law giving greater priority to property companies, a decision that would have significant implications for insolvency partners, landlords and creditors.
Alastair Lomax, legal director at Pinsent Masons, believes that the change will have a positive impact on the industry, preventing the profession from encouraging a ‘winner takes all’ attitude during the administration process.
Mr Lomax stressed that the insolvency expenses regime was there to protect third parties, and is not a “tool to be used by any party to gain advantage through the timing of the appointment”.
Changes to the process could have an impact on distressed business buyers, particularly when it comes to the timing of a sale and the burden of debt that could be passed on. 
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