Britain’s largest landlords are gearing up to sue PwC over the administration of Game to recoup unpaid rent.
The landlord group – including Land Securities, Hammerson, Capital Shopping Centres and British Land - believe that PwC was hired as administrator for Game the day after it was due to pay its rent in March so it could trade rent free for three months whilst a buyer was sought.
The throng have appointed law firm Berwin Leighton Paisner to advise them on a potential legal challenge, according to Property Week.
The retailer had a £80m annual rent bill when it collapsed into administration. PwC immediately closed 277 stores immediately. Five days later, Game was sold to private equity firm OpCapita.
Retail rents are paid three months in advance on a quarterly rent day, however if a firm falls into administration it only pays rent that it accrues after the collapse.
PwC’s appointment on the day after the March rent day means Game’s landlords lost out on rent for the quarter beginning April.
The legal challenge could act as a test case in what is a contentious legal area. Landlords believe a change in the law to a “pay as you trade” rationale where there would be a daily charge for the use of premises would be a fairer approach.
PwC partner Mike Jervis said that it closed 277 stores as it was unviable and for landlords to expect a full quarter’s rent and it would be “inequitable” for landlords to expect a full quarter’s rent for such a short period. He said that it was contrary to the legal position of an administration.