Administration Expenses: The Next Instalment

Keywords: administration expenses, High Court, British Gas Trading

The High Court has rejected the argument that amounts owing to British Gas Trading Ltd (BGT) under post-administration, deemed contracts for the provision of gas and electricity are automatically classed as expenses of the administration. The court has reserved for consideration, however, whether and if so how an administrator's conduct may give the liability super priority or bring the salvage principle into play.

Background and preliminary issue

The liquidators of the Peacocks group applied for directions in February this year to determine whether certain charges incurred under deemed contracts pursuant to Schedule 2B Gas Act 1986 and Schedule 6 Electricity Act 1989 should be treated as provable debts or administration expenses.