Arcadia close to seeing off CVA challenge
Arcadia, Sir Philip Green's fashion retail empire, is close to seeing off a legal challenge to its recently approved CVA from two US landlords.
According to The Sunday Times, the group is nearing out of court settlements with Vornado and Caruso, who launched a legal challenge to the insolvency process, which involved the closure of all of the group's Topshop stores in the US.
The landlords attempted to purse Sir Philip's group through the US courts arguing it had “manipulated and gerrymandered” the CVA vote to the detriment of the interests of its creditors.
It is believed they are close to dropping the action following negotiations with the retail tycoon.
As well as closing its 11 US stores, Arcadia plans to close 50 of its UK stores and is seeking rent cuts on 194 further UK stores.
It had been touch and go as to whether the vote would be approved and the first vote was dramatically delayed at the 11th hour as the group further sweetened the CVA deal in order to win sufficient votes from landlords to get the deal passed, which it was on 12 June.
In order for a CVA, which allows struggling companies to pay back an agreed proportion of their debt over a period of time, some 75% of creditors by value must approve it.