An insolvency procedure that has been used this year by high street brands including New Look, Carpetright and Jamie’s Italian is in urgent need of overhaul, industry bodies have claimed.
Lobbyists for insolvency practitioners and restructuring advisers are calling for reform of company voluntary arrangements, which allow retailers to cut rents and to shut sites typically at landlords’ expense.
R3 said that research by the universities of Wolverhampton and Aston indicated that there needed to be a cap on CVA lengths; more time for companies to plan the arrangements; clearer roles for directors and CVA supervisors; more engagement from public sector creditors, such as Revenue & Customs; and the introduction of standard terms.
Landlords are also taking action. Property giants including Legal & General and Westfield have hired the restructuring firm Begbies Traynor and the property agency JLL to engage with House of Fraser as it prepares to launch a CVA, according to The Times.
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