Game told to pay £3m rent left unpaid during admin process

Retailer to take decision to Supreme Court after Court of Appeal rules in favour of commercial landlord quartet

The Court of Appeal has ordered retailer Game to cough up £3m in unpaid rent, in a decision that could have big ramifications for firms that go into administration.

According to a report in Retail Week, a quartet of commercial landlords - Land Securities, Hammerson, Intu, and British Land - have won their appeal to make Game pay £3m in unpaid rent dating from the March 2012 period when the retailer entered administration.

The computer games specialist had reportedly taken advantage of a loophole allowing firms that enter administration just before rent is due and appoint an administrator within 10 days to legally avoid paying rent. The Court of Appeal decision appears to close that loophole, although Game has indicated it intends to pursue the matter into the Supreme Court. The decision seems likely to have a big impact on the extent to which administrators are able to keep retailers trading while insolvency proceedings go on.

"The real ramification of this decision is, however, that it will have a significant financial impact on all landlords, tenants and insolvency practitioners involved in current and future business insolvencies in this country," said a Game representative.

When £1.6bn-turnover outfit Game entered administration two years ago, it immediately closed 277 of its 600-plus UK stores. Within a week it was snapped up by investment house OpCapita, which also owned Comet at the time.