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Debenhams CVA challenge withdrawn

Property investment company M&G Real Estate has withdrawn its legal challenge to Debenhams’ company voluntary arrangement, which was approved by creditors in May. 

In a statement, Debenhams said the withdrawal followed “positive, constructive discussions [in which] both parties have resolved their concerns”.  

The department store chain’s CVA received a majority “significantly above” the required threshold of 75% on each proposal on 9 May, paving the way for 22 store closures by January 2020.

It followed the pre-pack administration of Debenhams, which placed it into the hands of lenders, and wiped out the value of shareholders’ stakes, including Sports Direct’s stake of almost 30%. 

Legal challenges from Combined Property Control and Sports Direct remain outstanding.

Debenhams chairman, Terry Duddy, said: ”I am pleased that M&G has recognised the necessity for the CVAs and that as a result of the discussions we have had, it has withdrawn its challenge.

”I call on Sports Direct and CPC to do the same. If they do not, we will seek to have it thrown out. In the meantime, we continue to make good progress with the company’s restructuring plans.”

 

 

 

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