IWG has been accused of “suspicious” conduct over the collapse of its Jersey-based subsidiary.
IWG placed Jersey-based Regus plc into bankruptcy last year after extracting a £644.5m dividend from the company, leaving its landlords high and dry as the company forced through rent cuts in the wake of the pandemic.
Vornado, a New York property firm, claims IWG forced landlords to “choose between a rock and a hard place” and challenged the decision of the Royal Court of Jersey to shift the handling of the bankruptcy to Luxembourg, where officials have more limited powers to investigate.
Witness statements from Glen Weiss, Vornado vice president, submitted to last week’s hearing labelled the insolvency as “sudden and suspicious”. Mr Weiss accused IWG of “using its position to force landlord beneficiaries to accept materially worse terms than they originally (and appropriately) agreed”.
He also attacked IWG’s move to change the name of the Jersey subsidiary to “Redox Plc” days before the original application for bankruptcy.
His statement said the choice of an “anodyne” name with no market presence “demonstrate what appear to be deliberate attempts by the IWG Group and the representor [Redox] to prevent their creditors from learning about these processes”.
Tim Regan, IWG’s company secretary, said Weiss’ “unspecified allegations” did not have “any substance” in an affidavit to the court last week. He added that 65% of the leases guaranteed by Redox “have been subject to some form of consensual resolution”.
