assignment parent company guarantee

Parent Guarantee Contract Parent Company Guarantee Template

Uploaded by, document information, available formats, share this document, share or embed document, sharing options.

Share on Facebook, opens a new window Facebook
Share on Twitter, opens a new window Twitter
Share on LinkedIn, opens a new window LinkedIn
Share with Email, opens mail client Email
Copy Link Copy Link

Did you find this document useful?

Is this content inappropriate, reward your curiosity.

You are using an outdated browser. Please upgrade your browser to improve your experience.

Home / Insights

Intra-group Assignments – What can a landlord expect from a parent company guarantor?

It is not unusual or unreasonable for businesses holding large assets, such as long term leases, to require flexibility to reallocate assets during a lease term within the company group.

However, since the decisions in Good Harvest v Centaur and K/S Victoria v House of Fraser there has been a question over the extent to which parent guarantees can be provided on an assignment if the parent company is already acting as a guarantor of the existing tenant.

The recent decision in Tindall Cobham 1 Limited v Adda Hotels has gone some way to clarify this.

In this case, the Tindall companies, part of the Hilton Group, were the tenant of a portfolio of hotels owned by Adda. Their obligations under the lease were guaranteed by the Hilton parent company.

Not only did their leases contain the usual restrictions on assignment without landlord’s consent, acting reasonably, but a further clause permitted intra-group assignments without landlord’s consent provided that:

Following the decision in K/S Victoria v House of Fraser that a requirement for a repeat guarantee was void under the Landlord and Tenant (Covenants) Act 1995, Tindall decided these additional provisos were invalid and so proceeded to assign the leases without consent.

Needless to say Adda, when faced with the loss of a valuable guarantor and a tenant of no value, which it would not have consented to under normal circumstances, disputed this interpretation claiming that the tenant was in breach of its covenants.

On appeal, whilst Tindall had by then conceded that landlord’s consent to the assignments was required, it maintained the landlord had to consent in accordance with the subsequent intra-group provisos. As the requirement for repeat guarantee was void under the Landlord and Tenant (Covenants) Act 1995, the parent company was therefore off the hook.

In considering the extent to which the invalid intra-group proviso should be severed the Court of Appeal applied a common sense approach to ensure a commercial solution. It held that both requirements should be disregarded and so the lease provision in respect of intra-company assignments fell away entirely. This meant the tenant continued to have a degree of flexibility to transfer the leases to other intra-group company albeit with landlord’s consent and the landlord had the opportunity to seek a different guarantor or to refuse consent if it was not satisfied with the covenant strength offered so protecting its assets.

Whilst this case has provided us with an insight into how the Court will look at these obligations, it should be noted that the outcome did turn on the interpretation of the wording of the lease. A different case may lead to a different outcome.

It is clear that the question surrounding repeat guarantees will continue to be a concern for landlords and tenants alike. Tenants, wishing to reorganise their business, may well find themselves in a difficult position if unable to provide an equivalent guarantee or suitable alternative, whilst landlords, wishing to protect their assets, will need to ensure they are fully aware of the circumstances to any proposed intra-group assignment. Both parties should consider other options. For example, an existing parent company guarantor could continue to act as guarantor for the existing tenant under the authorised guarantee agreement it will be providing on the assignment of the lease or a rent deposit from the incoming tenant may be a sufficient substitute.

Follow us online

You can register online or follow us on Twitter or LinkedIn to receive our latest news, events and publications.

Popular insights

Direct(or) responsibility: 10 ways a director could be held personally liable in 2022.

A recently published case has shone a new light on the well-known fact of English company law – that a company has its o...

Remote supervision in professional services firms – five top tips

In this short guide, we discuss five top tips for firms when supervising trainees and junior practitioners who work remo...

How to successfully challenge witness statements

Witness statements are a crucial part of any case. Their purpose is to show the case in its strongest light. Indeed, a c...

Need more information about the above people and legal expertise? Talk to one of our lawyers: +44 (0)20 7628 2000

Privacy Overview

Group assignments and the “repeat” parent company guarantee

Since the Court of Appeal’s decision in K/S Victoria Street v House of Fraser (Stores Management) Ltd [2011] EWCA Civ 904 , concerns have existed over those post-1995 Act leases (and there are many) in respect of which a group assignment clause had been included to provide an element of freedom to assign the lease within the original tenant’s group of companies, provided the parent body guarantor of the original tenant committed to a repeated parent body guarantee in respect of all assignees within the group.

In the House of Fraser case, the Court of Appeal had confirmed that where, in relation to a post-1995 Act tenancy, a tenant’s guarantor agreed to provide a guarantee of the tenant’s immediate assignee (i.e. a “repeat” guarantee), that agreement was rendered void by the anti-avoidance provisions of the 1995 Act ( section 25 LTCA 1995 ) as it had the effect of frustrating the tenant’s guarantor’s release from liability on a lawful assignment of the lease under section 24(2) LTCA 1995 . Since, as a result of the House of Fraser case, such repeat guarantees will be void, where would that leave the parties to a lease which included such a provision?

In Tindall Cobham 1 Ltd v Adda Hotels [2014] EWCA Civ 1215 , the tenant’s lease stated that:

“The Tenant shall not assign this Lease to any Associated Company of the Tenant without the prior consent of the Landlord Provided Always that … the Landlord shall be entitled to impose any or all of the following conditions set out in sub clauses (a) and (b) below:

(a) that the Tenant shall provide the Landlord with notice of any such assignment within 10 Working Days of completion of the same;

(b) that on any such assignment, the Tenant shall procure that the Guarantor and any other guarantor of the Tenant shall covenant by deed with the Landlord in the terms set out in the Sixth Schedule at the Tenant's sole cost;

and subject to the Tenant's compliance with such conditions the Landlords consent shall be given.”

The Court of Appeal ruled that, applying the House of Fraser case and section 25 LTCA 1995, the proviso (i.e. the words from “Provided Always” to the end) were rendered void, thereby leaving the covenant as a simple qualified covenant against assigning to associated companies without the prior consent of the landlord. Therefore, applying section 19(1)(a) of the Landlord and Tenant Act 1927, the landlord will be able to withhold its consent, but may not do so unreasonably.

Add new comment

Cookies on Companies House services

We use some essential cookies to make our services work.

We'd also like to use analytics cookies so we can understand how you use our services and to make improvements.

You've accepted analytics cookies. You can change your cookie settings at any time.

You've rejected analytics cookies. You can change your cookie settings at any time.

We use cookies to make our services work and collect analytics information. To accept or reject analytics cookies, turn on JavaScript in your browser settings and reload this page.

Please press ENTER to search

HOLLINWOOD HOMES LIMITED

Company number 04605484

Assignment of parent company guarantee

Persons entitled.

Cumberland Building Society

Amount secured

All monies due or to become due from the company to the chargee on any account whatsoever

Short particulars

Rights title and interest in and to the parent companmy guarantee dated 25 august 2010 including each instrument, security, guarantee see image for full details.

Assignment Of A Trust Company

Russell, Kan., March 11.- The Central Kansas Loan and Trust .company has made an ussignment for the benefit of its creditors to Charles P. Copeland. The liabilitles are stated at S'.'üO.OOO. Thj company, like many others, has öperatedextensively in western farmer loans, its guaranteed socurities boing widely scattered ainong eastern investors. Tlie assets are nominally about WUO.üui)

Subjects Ann Arbor Argus Old News

This website uses cookies

We place some essential cookies on your device to make this website work. We'd like to use additional cookies to remember your settings and understand how you use our services. This information will help us make improvements to the website.

Catalogue description Assignment Parent Trust and Finance Co. to Veno Drug Company (1925) Limited

This record is held by st helens archive service.

See contact details

Have you found an error with this catalogue description? Let us know

Your details

If you provide contact details, we will be in touch about your request within 10 working days.

Help with your research

How to use this catalogue

Sign me up to the mailing list

Subscribe now for regular news, updates and priority booking for events

Find out more

All content is available under the Open Government Licence v3.0 , except where otherwise stated

Cookies on Companies House services

We use some essential cookies to make our services work.

We'd also like to use analytics cookies so we can understand how you use our services and to make improvements.

You've accepted analytics cookies. You can change your cookie settings at any time.

You've rejected analytics cookies. You can change your cookie settings at any time.

We use cookies to make our services work and collect analytics information. To accept or reject analytics cookies, turn on JavaScript in your browser settings and reload this page.

Please press ENTER to search

HOLLINWOOD HOMES LIMITED

Company number 04605484

Assignment of parent company guarantee

Persons entitled.

Cumberland Building Society

Amount secured

All monies due or to become due from the company to the chargee on any account whatsoever

Short particulars

Rights title and interest in and to the parent companmy guarantee dated 25 august 2010 including each instrument, security, guarantee see image for full details.

Home > NRC Library > ADAMS Public Documents

Request for Additional Information Regarding the Annual Certification of the Westinghouse Parent Company Guarantee (Technical Assignment Control Number L33282).

Accession Number: ML13281A822

Date Released: Friday, October 18, 2013

Package Contents

The following links on this page are to Adobe Portable Document Format (PDF) files. To obtain a free viewer for displaying this format, see our Plugins, Viewers, and Other Tools .

IMAGES

Form of parent company guarantee (Word, 38KB)
Parent company guarantee on demand
Parent Company Guarantee Template Word
Letters of support
How to secure customer risk with a parent company guarantee?
Ucsc Parental Letter of Guarantee Form

COMMENTS

Parent Guarantee Contract Parent Company Guarantee Template
Parent Guarantee Contract Parent Company Guarantee Template - Free download as PDF File (.pdf), Text File (.txt) or read online for free
Assignment of parent company guarantee
BANNATYNE FITNESS (8) LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity
Intra-group Assignments
It is not unusual or unreasonable for businesses holding large assets, such as long term leases, to require flexibility to reallocate assets during a lease term within the company group
Group assignments and the “repeat” parent company guarantee
... concerns have existed over those post-1995 Act leases (and there are many) in respect of which a group assignment clause had been included to provide an element of freedom to assign the lease within the original tenant's group of companies
Charge
HOLLINWOOD HOMES LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity
Assignment Of A Trust Company
Russell, Kan., March 11.- The Central Kansas Loan and Trust .company has made an ussignment for the benefit of its creditors to Charles P. Copeland. Thj company, like many others, has öperatedextensively in western farmer loans
Assignment Parent Trust and Finance Co. to Veno Drug Company (1925) Limited
Our vision is to lead and transform information management, guarantee the survival of today's information for tomorrow and bring history to life for everyone
Charge
HOLLINWOOD HOMES LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity
Request for Additional Information Regarding the Annual Certification of the Westinghouse
ML13281A827 - Request for Additional Information Regarding the Annual Certification of the Westinghouse Parent Company Guarantee (Technical Assignment Control Number L33282). (1 page(s), 10/7/2013)