In the event that an administrator sells a business with arrears of pay which the purchaser picks up under Reg 4(2)(b) of TUPE these liabilities normally fall out of the insolvent estate. An administrator can in some circumstances point to this as one reason why the sale gave rise to a better result for the remaining creditors than would have been the case in a liquidation.
What happens, however, if the purchaser then seeks to make a subrogated claim back against the estate of the insolvent company in administration? Is there any reason why a purchaser should not make such a claim?
Peter Whalley, Partner at James Whalley