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Sports Direct seeks support for Debenhams legal challenge

Alice Ierace
20 May 2019

The Sports Direct group is attempting to gather support for a legal challenge to Debenhams' restructure package approved earlier this month.

The department store, secured approval from creditors and landlords to enter a CVA (Company Voluntary Arrangement) enabling it to close 22 stores by early next year.

As a result, Debenhams will also seek rent reductions on more than 100 of its stores with a range of 25% to 50% is it is believed. In addition a further 30 stores will be closed in the coming years.

A source close to Sports Direct said the company was talking to landlords and other third parties about legal action as it published a review of Debenhams’ CVA process on Sunday, The Guardian reported.

The document also says the company found "serious issues" within the CVA process that needed addressing. Now, creditors have until 6 June to challenge the Company Voluntary Arrangement deals. 

Further to this, the document criticises the department store's plan to to exit its distribution centre in Sherburn next year.

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