Some of the UK’s biggest landlords are furious about PowerHouse’s company voluntary arrangement (CVA) which includes the scrapping of parental guarantees given by liquidators Pacific Retail Group ensuring that liabilities on the leases of closed stores would be paid.
The landlords include Prudential, British Land, Land Securities, Scottish Widows and Standard Life. Some of them are being offered just six months of rent, about 28p in every £1 owed.
PowerHouse has shrunk from 200 stores to 52 through closures and disposals. Now the landlords are considering legal action to challenge the validity of the CVA and its attempt to strip them of the parental guarantees.
The Financial Times says there could be severe implications for other landlords with CVAs used as tools to dump guaranteed liabilities if PowerHouse succeeds.
Lovells and Addleshaw Goddard are representing the landlords.
References: Financial Times 06/03/06 page 2
