Essential reading for retailers and suppliers in the home improvement market

Debenhams says challenges to CVA are “without merit”, as Mike Ashley launches legal battle

Published: 11 June 2019 - Fiona Garcia
 

House of Fraser and Sports Direct owner Mike Ashley has submitted a legal challenge to Debenhams’ company voluntary arrangement (CVA), which was approved by the department store’s creditors last month.

However, Debenham’s new owners’ say the claims are “spurious” and the retailer will plough ahead with its debt restructuring process, as planned.

The legal challenge from Mr Ashley is the latest round in his battle with the department store, which was taken over in a pre-packed administration by a syndicate of banks and hedge funds it owed money in April. The deal scuppered Mr Ashley’s attempt to take control of the retail business and wiped out his stake in the company, following an ongoing wrangle with the board.

Mr Ashley’s firm, Sports Direct – which also owns House of Fraser – was entitled to take part in the CVA vote, as it is owed more than £500,000 by Debenhams at the time the CVA was proposed.

Debenhams executive chairman Terry Duddy said: "We believe the challenges to the CVAs to be without merit and will vigorously defend them. Given the overwhelming support for the proposals from creditors, including 80% of landlords, this is an unnecessary distraction as we implement our restructuring plans.”

Meanwhile, a spokesperson for Debenhams’ new owner, Celine UK NewCo 1 Ltd, said: “We note the spurious challenges to Debenhams’ CVA proposals, which were approved by the vast majority of landlords and more than 90% of all creditors. We will move forward with our debt restructuring process, as expected. The CVA provides a platform to deliver a turnaround in the business for which the lending group has committed £200million of new funding and remains supportive.”

As part of the restructure process, Debenhams plans to close at least 22 stores in 2020 and force through rent cuts and changes to lease terms on many others. This is on top of the closure of 50 stores, as previously announced by management in October 2018; reducing the retailer’s portfolio from 166 to 94 by the end of next year.

Stores expected to close in 2020 are: Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton.

Comments


(Your email address will not be published)
Already Registered?
Sign In
Not Yet Registered?
Register
Printable View E-mail Bookmark
*

What do you think?


Are we seeing a rise in consumers interested in smart home security?



Latest reader comments

re: Further Homebase closures ahead

Miss l'a tesha gc Wilson
Please keep me updated regards all Store closures Thank you...

re: Graham Bell to head up B&Q as part of Kingfisher reshuffle

Peter Earl
I HOPE GRAHAM BELL THE NEW CEO OF B&Q GETS TO GRIPS OF THE COMPANY VERY SOON.MY WIFE WENT FROM SHADOXHURST TO GILLINGHAM TO GET SOME ...

re: Quick and easy wood treatment oil from Frogsuit

Helen
hi, I have some brand new teak garden furniture would the clear be suitable to keep the new look of the wood....

re: Hardware store wins fight against music licence body

Georgia
We are a small business of 5 people who watch the news for 30 minutes a day on lunch ( 4 days a week) and have been sent a bill for £900!!!?...

re: Customers complain B&Q paint is wrecking their cars

Rosie
Susan did you get an update, we have just experienced this, husbands car is completly ruined. BNQ have washed their hands of us. 40 pounds ...

Most read stories