Landlords opposed to Virgin Active’s restructuring plan are awaiting judgment after a week-long court case.
The gym group has been asking the High Court to formally approve a restructuring plan that will hit landlords of certain premises. Landlords oppose the plan.
Time is ticking. The company is due to run out of liquidity by 10 May and might be forced into administration. Time is so tight that the court sat on Bank Holiday Monday to ensure it would finish on time today.
“It’s obvious that I am going to reserve judgment because of the huge volume of submissions,” Mr Justice Snowden, who was hearing the case, said today. “I am conscious there is a timescale.”
Snowden J said that he intended to produce a judgment in time, but “if there is any danger” of that not happening he would issue his decision and give a judgment with reasons later.
During the hearing, Tom Smith QC, representing various Virgin Active group companies, told the judge that an “ad hoc” group of landlords object to the plan, and dispute whether a key test – whether they would be no worse off under the proposed restructuring than under the alternative – has been satisfied.
He added that the other main question for the court was whether it is “just and equitable” to exercise its discretion to sanction the plan.
The plan, if approved, will see some leases of poorly performing gyms terminated, and certain other landlords being paid less in rent.
