New Clause 394

Company Law Reform Bill [Lords] – in a Public Bill Committee at 1:45 pm on 20th July 2006.

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Protection of persons holding under a lease (EW and NI)

‘(1) The court must not make an order under section (Power of court to make vesting order (EW and NI)) vesting property of a leasehold nature in a person claiming under the company as underlessee or mortgagee except on terms making that person—

(a) subject to the same liabilities and obligations as those to which the company was subject under the lease, or

(b) if the court thinks fit, subject to the same liabilities and obligations as if the lease had been assigned to him.

(2) Where the order relates to only part of the property comprised in the lease, subsection (1) applies as if the lease had comprised only the property comprised in the vesting order.

(3) A person claiming under the company as underlessee or mortgagee who declines to accept a vesting order on such terms is excluded from all interest in the property.

(4) If there is no person claiming under the company who is willing to accept an order on such terms, the court has power to vest the company’s estate and interest in the property in any person who is liable (whether personally or in a representative character, and whether alone or jointly with the company) to perform the lessee’s covenants in the lease.

(5) The court may vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the company.’.—[Margaret Hodge.]

Brought up, and added to the Bill.