House of Fraser CVA challenge by landlords is settled out of court
The landlords group in Scotland that opposed House of Fraser’s CVA proposals has reached an agreement with the department store chain and withdrawn its legal challenge.
Mark Fry of Begbies Traynor and Charlotte Coates of JLL, the landlords’ legal advisors, said in a statement: “Although we will not have our day in court, we are pleased with the outcome and hope that our landmark legal challenge sends a clear message to any other companies considering a CVA, on the importance of transparency and fair treatment for all creditors throughout a CVA process.”
Neither House of Fraser nor the landlords’ group would give details of the settlement.
The landlords had argued that the proposals were unfairly prejudiced against certain creditors and also highlighted what they regarded as material irregularities in the implementation of the CVA.
Following the settlement, House of Fraser said it will now be pressing ahead with the CVA proposals that include plans to close 31 of its 59 stores in January. The news has also made it easier for House of Fraser to broker a rescue deal. The company is urgently seeking new funding after Chinese retail group C. Banner walked away from its plans to invest in the business last week.
A spokesperson for the joint supervisors of the House of Fraser CVAs said: “The joint supervisors can confirm that there has been a settlement to the legal challenge to the House of Fraser CVAs.
“This commercial settlement has been reached to avoid the costs of litigation and allows the companies to continue its investment process without the CVAs being subject to the risk of further legal proceedings.
“The joint supervisors will continue to monitor the progress of this investment process and will update creditors as appropriate.”
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