Designer mini-chain Flannels has unveiled details of its CVA proposal including payment terms to suppliers.
Flannels has appointed financial services firm Deloitte to handled the proposed CVA as revealed by Drapersonline.com, after a troubled trading climate and decline in consumer spend hit the 15-store retailer.
If approved the CVA would result in the closure of a Flannels store in Liverpool and Birmingham.
Deloitte said in a statement that should the CVA proposal be approved, creditors and members of the company would receive approximately 60p in the pound. Suppliers with retention of title rights are likely to receive 70p in the pound.
The CVA proposal needs the support of 75% of unsecured creditors and 50% of the company’s members to be approved.
A meeting of creditors and members to vote on the CVA proposal will take place Monday November 30 at 10:30am at Halliwells LLP, 3 Hardman Square, Spinningfields, Manchester.
Deloitte reorganisation services partner Bill Dawson said: “This CVA allows the business to remain as a going concern and to maintain its trade.This should allow the company to generate future cash flows from which the arrears of debt can be partially repaid. It offers better job security to circa 160 employees and more certainty to its trading partners than the alternatives.”
“The use of a CVA will result in a greater return to creditors compared to alternative insolvency procedures such as an administration or liquidation. The growing use of CVAs demonstrates that in the appropriate situation administration can be avoided.”
The retailer’s bank has confirmed its support for the CVA proposal.