T.M. Lewin Australia administrators have sought legal protection around personal liability for its leases.
In a Federal Court bid last week, administrators for Ernst & Young sought an extension to the date in which they will become personally liable for rent across its Australian stores.
Administrator Alexander McCallum argued the COVID-19 pandemic – and government restrictions to reduce transmission - had resulted in a significant decline in the company’s retail and wholesale sales.
In March 2020, T.M.Lewin Australia temporarily closed all five national stores and they have remained closed since.
Since the closure of its retail sites, no revenue has been generated by the company.
In the meantime, the rent under the leases of the retail stores is accruing at a total of approximately $215,000 per month.
The court ruled administrators are not liable for rent in New South Wales or Queensland to August 7 and October 2 in Victoria.
T.M. Lewin has around $2.5 million in unsold stock in Australia across stores and warehouses, with administrators actively pursuing a sale of business.
According to reports, the retailer owes $10 million to creditors.
In April, the Federal Court made a ruling that collapsed fashion retailer Colette by Colette Hayman did not need to pay $648,923 owing in rent due to its extraordinary circumstances.
Deloitte administrators argued they should not be personally liable for ongoing rent, and not pay any rent, as doing so would deplete Colette Group’s resources and limit the benefit from a future sale as a going concern.