Bankruptcy estate’s liability for maintenance charges

The Supreme Court recently set a precedent (KKO 2015:103) regarding the liabilities of a bankruptcy estate in a case that concerned maintenance charge receivables (incurred after the beginning of bankruptcy proceedings) of a limited liability golf company in connection with the golf company’s shares (i.e., were they considered administrative expenses, and as such, were they payable on becoming due and before the disbursements towards other creditors’ claims in bankruptcy).

The questions before the court were, whether the maintenance charges were administrative expenses for which the bankruptcy estate was liable and if so, could the bankruptcy estate be discharged from its liability by abandoning the shares for the benefit of the golf company.

The Supreme Court found that the bankruptcy estate was not liable for the maintenance charges as administrative expenses in a precedent that seemed to tie the coverage of the administrative expenses more rigidly to the letter of law. The precedent may also be seen to support the legal objectives of bankruptcy proceedings in general. Further, the precedent could be applied to the maintenance charges connected to other types of shares as well.

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