Debenhams CVA upheld

A challenge by a group of landlords to the voluntary arrangement of the Debenhams retail group has been dismissed by Mr Justice Norris. The landlords claimed that they were unfairly prejudiced and that there was a material irregularity in the CVA. It was also claimed that the CVA went beyond the jurisdiction confirmed by the Insolvency Act 1986.

Specifically, the landlords argued that future rents could not be compromised, that variations of rent were automatically unfairly prejudicial and that they were treated less favourably than other unsecured creditors. They also argued that the proposal had been misleading as to potential challenges to security arrangements.

All of the above arguments failed although Norris J did accept that the CVA could not compromise landlords rights of forfeiture and these provisions were ordered to be deleted. It is not known as to whether the landlords intend to appeal the decision

Posted 11:31 AM | Permalink