A consortium of major UK landlords is preparing to launch legal action against PwC over the administration of Game Group.
Landlords including Land Securities, Hammerson, Capital Shopping Centres and British Land have instructed law firm Berwin Leighton Paisner to advise it on a potential class action suit in a bid to recoup unpaid rent.
Game collapsed into the hands of administrators at PwC on March 26, the day after the rent quarter day, leaving landlords deprived of three months’ rent.
The landlords want to see the law changed so that landlords can recover losses when rent is not paid on the quarter day and administrators continue to trade the shops while a buyer is sought.
Game is thought to have had an £80m annual rent bill when it collapsed. Some 277 stores were closed and 333 continued to trade. Game was sold to OpCapita five days later.
Mike Jervis, PwC partner, said: “We closed 277 stores during the five days of trading in the administration because they were unviable. It would be inequitable for landlords to expect a full quarter’s rent for that short period and contrary to the legal position in an administration.”
“The stores remaining open are being operated by the purchaser and a large number of landlords are taking the opportunity to enter into formal assignment agreements which regularise the position on the March rent.
“In the meantime, we remain in dialogue with a number of landlords. We will continue to make rent payments under the terms of the lease (or however varied consensually) in line with the obligations on the administrators, until such time as the leases are assigned or surrendered.”
Annabel.Dixon@estatesgazette.com
