Arcadia Group’s company voluntary arrangement (CVA) has been branded a “farce” by landlords after the process was suspended at yesterday’s creditors’ meeting, Drapers has learned.
Creditors for all seven of the CVAs have been left in limbo after Arcadia decided to adjourn the meeting as it quickly became clear that they would not all be approved.
Drapers has learned that vote counting had been ongoing for several hours when it became evident that some CVAs had passed, but others were going to fail. At this point Arcadia decided to adjourn the process so it could “conduct further dialogue with a few landlords”.
The creditor vote will now take place on 12 June but only for the CVAs that failed to pass on Wednesday.
One landlord agent said: ”We voted. We were in the room. Then they suspended counting after a couple of hours. [Arcadia] expected some of the big landlords to go with them, and they didn’t. I used to do these CVAs all the time and [a postponement] has never happened before. It’s a farce.
“How can a business say they are going to go into administration on a Thursday and yet be able to put a vote back by a week?”
News of the postponement came as several landlords, including Intu and M&G Investments were reported to have not backed the CVA proposals either in part or in their entirety.
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Landsec is believed to have not yet agreed to the CVA proposals. Drapers understands that the postponement of the CVA process is permissable under rules of the process.
One property agent said: “I didn’t realise that they could even do that [pause a CVA]. I am not aware of it happening before. I haven’t seen the votes but I thought beforehand the signs were there because Arcadia had been negotiating with landlords almost outside the remit of the CVA to see what needed to happen to get their vote secured.”
Drapers understands that Intu, M&G and Landsec are the landlords that have reservations over voting for the CVA. British Land, Hammerson and Aviva believed to have agreed to the proposals.
One landlord told Drapers that they had been placed in “difficult circumstances” because of the pressures of other retailers stating that the CVA would undermine their own competitiveness.
It said: “We have had to take concerns of other retailers and other landlords on board when coming to our decision.”