Richards J provided directions on issues brought forward by administrators including:
- the treatment of interest
- in the context of various provable and non-provable debts.
The newest in the series of judgments to deal with interest arising out of creditors’ claims in the administration of Lehman Brothers International (Europe) (LBIE), this latest instalment sought to deal with six supplemental issues on which the administrators sought directions.
One interesting discussion related to:
- determining the applicable rate of interest under contractual agreements where such entitlement is triggered after entry into administration
- applying Rule 2.88(9) Insolvency Rules 1986 in these circumstances.
Richards J clarified that no interest is contractually payable on a contingent debt until the contingency occurs. At that point, the creditor will be entitled to interest at the Judgments Act rate prevailing at the Date of Administration.
Rule 2.88(9) is intended to ensure that the creditor receives what it should have received under the contract, had there been no administration.