Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
We look at this case on the landlords’ challenge of the Debenhams Retail Ltd (Debenhams) company voluntary arrangement (CVA) where Norris J rejected four of the five grounds for challenge and approved the modified CVA.
Discovery (Northampton) Ltd and others v Debenhams Retail Ltd and others  EWHC 2441 (Ch)
In this case, the Debenhams restructuring is back on track and the CVA will continue despite vigorous challenges from the landlords. It provides welcome clarifications in relation to CVAs:
The applicants were six landlords seeking to challenge the CVA of Debenhams under section 6(1) of the Insolvency Act 1986 (IA 1986). The applicants had leases with 30 year terms with automatically escalating rents for the first ten years of the term, with rent then being reviewed on an upwards only basis at five yearly intervals. The Debenhams’ directors proposed the CVA to address unsustainable property costs by compromising future liabilities for rent and business rates.
Sports Direct International Plc were originally co-applicants but were removed for lack of standing as they were paid in full under the CVA. However, they agreed to fund the applicants’ costs of maintaining the challenge and indemnified them against any adverse costs order arising.
The CVA principally affects the landlords and local authorities and as is commonplace, the CVA grouped leases into six categories according to the extent to which the company sought to alter its obligations under the relevant leases. The categories were grouped by reference to the financial performance and sustainability of rent for the individual properties, ranging from category 1—those performing relatively strongly with rent considered to be market rate (or at a sustainable premium) to category 5—those the company considered not to be financially viable.
The proposed CVA terms and proposed effect on the leases was to:
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234