Sep 19, 2019
Debenhams beats legal challenge to restructuring
UK department store chain Debenhams has won a High Court battle with a group of landlords who had challenged the restructuring process that brought the company out of administration in May. The case, brought by six landlords with funding from Mike Ashley's Sports Direct retail chain, claimed that the "Company voluntary arrangement" insolvency process approved by Debenhams' creditors treated them less favourably than other unsecured creditors. "We are delighted that the court has today confirmed that our CVA is effective and will continue to be implemented as planned," said Debenhams chief executive Stefaan Vansteenkiste. If the challenge had been successful, it could have led to the Debenhams restructuring being unwound and would almost certainly have pushed the retailer into administration. Although it funded the case, Sports Direct is not a landlord of Debenhams and was not party to the legal challenge. Debenhams has previously accused Sports Direct of funding the legal costs of the lawsuit in order to drive Debenhams into administration so that it can "Pick up its assets on the cheap".
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