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ARTICLE · 28 NOVEMBER 2012

Disclaimer of lease by a landlord's liquidator

This case may provide guidance to liquidators of insolvent landlord companies wishing to disclaim leases to tenants.

AustraliaReal Estate and Construction
Focus: Re Willmott Forests Limited (in liquidation) [2012] VSCA 202
Services: Property & Projects
Industry Focus: Property

Most disclaimers of lease occur when a liquidator is appointed to an insolvent tenant company. After conducting enquiries and ascertaining that it is unprofitable to keep the insolvent company operating, the liquidator is then able to 'disclaim' the lease by giving notice to the landlord. The effect of this is that the lease comes to an end immediately and the liquidator has no further obligations to the landlord. This procedure is intended to allow a prompt and efficient winding up of the affairs of the insolvent company.

However, what happens when a liquidator is appointed to an insolvent landlord company? Is the liquidator able to disclaim the lease, against the interests of the innocent tenant?

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