Jul 22, 2019
Debenhams could enter administration in September
A judge has raised the chances of department store Debenhams entering administration as early as September after ruling that a landlord bankrolled by Mikes Ashley's Sports Direct group can expedite a challenge to Debenhams' restructuring proposals. The court decision was made after Combined Property Control Group, which owns six properties let to Debenhams, challenged the company voluntary arrangement, or CVA, that the retailer's unsecured creditors approved in May. The landlord wants an expedited trial because of what it regards as unfair conditions in the terms of the refinancing of the company, where security of £228m of assets passed to previously unsecured creditors. CPC Group says the company needs to enter administration by September 29 or the unsecured creditors - the landlords, local authorities and suppliers - will potentially lose £228.8m that could otherwise be clawed back. Mike Ashley's Sports Direct was originally named as a party in the case but has since removed itself after Debenhams lawyers argued that it was not significant enough as a creditor to challenge the CVA. However, it is still committed to bearing the costs of the action. Debenhams' chairman, said Sports Direct was "Deliberately acting against the vast majority of Debenhams' stakeholders, including the more than 90 per cent of our creditors who supported our CVAs".
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