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JP Morgan has taken Sports Direct to the High Court, accusing the retailer of being owed £5.4m due to the disrepair of a large UK venue.
The sportswear chain, ultimately a tenant of the bank, vacated the complex in Wigan, northwest England, in 2019, taking advantage of a break clause in the 10-year lease it first signed in 2014.
Sports Direct, owned by Mike Ashley’s Frasers Group, is accused of breaching a number of covenants and causing “loss and damage” by failing to complete most of the refurbishments before leaving as required by the contract. Bank this month.
Lawyers for JPMorgan Europe said in the filing that Sports Direct had more than six months to complete “any alterations, cover-ups or alterations made without the landlord’s consent” – which the bank would then have to make before leasing the property again this work. . This equates to £3.3 million.
The site includes a distribution center, office and warehouse space, as well as two helicopter hangars and parking.
“In the final six weeks of the lease, (Sports Direct) started to remove the mezzanines and racks,” said Mills & Reeve, representing JPMorgan Europe. “They did a poor job and ran out of time. . . . There was considerable debris on site, numerous fixing bolts protruding from the floor, and service disconnections including safety equipment such as fire alarms and sprinklers were poor,” they added.
They claim the bank lost £1.8m in potential rent during the renovation and advertising of the property. They also asked for interest to accrue from November 2022 until the £3.3 million is paid. The £5.4m balance claimed by JPMorgan relates to this interest, as well as other miscellaneous payments such as survey fees.
The bank claims it provided Sports Direct with a report in November 2022 detailing various charges, some of which have been updated for the courts. It added that the retailer should have responded under the so-called shabby agreement at the time, but it did not.
Sports Direct and JPMorgan declined to comment.
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