The following Restructuring & Insolvency guidance note Produced in partnership with Tim Carter of Stevens & Bolton LLP provides comprehensive and up to date legal information covering:
Real estate often forms part of the assets of an insolvent company to be sold by an administrator and can frequently be key to a potential buyer so it can continue the business after completion. However, a buyer does need to be aware that there are a number of significant differences in the acquisition of a property from an insolvent company and the buyer will need to take a different approach from when a company is solvent. This Practice Note highlights the key differences in approach between acquiring property from a solvent company and one that is in administration, typically in the context of leasehold transactions, although freehold transactions are also covered.
Contracts for the sale and purchase of land are founded on the legal principle of caveat emptor (buyer beware) which means it is the buyer’s responsibility to carry out as much due diligence as it needs in order to satisfy itself that it wants to proceed with the acquisition of a property. Ordinarily a buyer would be afforded the requisite amount of time properly to satisfy itself but in the context of a sale of a property owned by an insolvent company, timing is key, especially in a pre-pack situation. The administrator will want
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