IWG angered landlords with the move in October, which came after it drew a £644m dividend from the Regus plc subsidiary last year.
The decision effectively left over 600 landlords with leases guaranteed by Regus plc with no recourse, as parent IWG pushes for rent cuts in the wake of the Covid-19 crisis, while still unconscionably charging ALL of it’s tenants (whom they misclassify as “licensees) FULL rent for services they did not render.
Unconscionability (sometimes known as unconscionable dealing/conduct in Australia) is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience.
Carey Olsen, a Jersey law firm, is leading the action and expects to act on behalf of around 15 landlords from the UK, US, Japan and the Netherlands to challenge the Royal Court of Jersey’s decision to pass the handling of the bankruptcy to Luxembourg, due to the subsidiary’s tax residency there.
Marcus Pallot, a partner at Carey Olsen, said: “There are serious questions to answer over the bankruptcy of Regus plc.
“All of the landlords we have spoken to cannot believe that Regus apparently gave away its assets in January 2019, went to court in Jersey to admit its bankruptcy, and then went to court in Luxembourg to get itself declared bankrupt – and they weren’t told about any of this until it was too late.
“They cannot believe it can be right to give away around £650m of assets and then later file for bankruptcy because you have over £800m of guarantee liabilities and no assets to satisfy that with.”