Landlords ponder action after House of Fraser CVA
House of Fraser faces a four week wait to find out if it can press ahead with its CVA that will see more than half of its stores close.
The chain secured the backing of the required 75% of creditors at a lengthy meeting on Friday afternoon, but a group of landlords are considering their position and could take legal action.
They claim that landlords are facing the brunt of the cost of the plan, compared with shareholders and bondholders.
Creditors have a 28 day window to take legal action.
‘It is disappointing that the CVA has been agreed without proper engagement with the landlords, many of whom manage the pensions and investments of the man in the street, despite them having so much at stake through the process,’ said Mark Fry of Begbies Traynor and Charlotte Coates of JLL, who had been advising a group landlords.
‘However, with landlords' voting power reduced by an arbitrary 75% of the value of their already discounted claims, the odds were always stacked against them.
‘The landlords now have a 28-day window to consider whether to make a legal challenge against the process and will be looking at their options closely.’
‘The CVA proposals have been approved by our creditors and we are grateful for their ongoing support and belief in the future of House of Fraser. This was clearly a difficult decision to take but is, ultimately, the only one to secure our future,’ said Alex Williamson, House of Fraser chief executive.