Security on leases

The insolvency team has acted for the liquidator of a convenience store group which had provided security over the leases of its stores to a supplier who had lent funds. The security provided a charge over the goodwill attaching to the leases.

Further to the liquidation, the liquidator and the supplier could not agree upon the value of the security because the lender argued the goodwill of the business attached to the lease and should be included in the valuation.

The court determined that the proportion of goodwill adearing to the lease was a matter of fact and considered covenants, the type of business and the geographical location. In this case the court determined that 50% of the goodwill attaching to the business attached to the lease and made an order accordingly.

Posted 9:29 AM | Permalink