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By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

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  • Overview

    CVAs are attracting controversy as they are being used as a means to allow companies to continue to operate while shutting loss making stores thus cutting overheads, reducing debts and rents all with the aim of keeping the business in operation and avoiding administration. Due to the change in consumer confidence and shopping habits with more and more consumers shopping online, retailers such as New Look, Carpetright and Mothercare have used the CVA process as well as restaurant chains such as Prezzo and Jamie’s Italian who have seemingly expanded too quickly.

    The CVA process is started by an insolvency practitioner who will work out an ‘arrangement’ covering the amount of debt a company can pay and a payment schedule. The practitioner must do this within a month of being appointed.
      
    The practitioner will then write to all creditors about the proposed arrangement and invite them to vote on it. If the CVA proposal is approved by three-quarters (by value) of the company’s creditors voting on the CVA, it binds all creditors regardless of how or whether they voted.

    This has caused uproar in the retail sector as some landlords argue that CVAs should only be used as an emergency option to prevent the collapse of a business and to facilitate restructuring; save costs and raise new funds to avoid administration. It should not be used by tenants as a way of improving operating profits by reducing rents. 

    Some retailers are outraged that other companies have secured lower rents through a CVA. Fashion retailer Next for example are seeking to include a CVA clause in their leases which provides that if their landlord agrees rent reductions through a CVA with another tenant then the landlord must lower Next’s rents. 

    The financial impact for retail portfolio owning landlords could be significant and they need to be live to the prospect that a tenant may seek to use a CVA to rid itself of underperforming stores and/or get rental discounts, or more worryingly, seek a rent reduction themselves where a neighbouring tenant has received more favourable terms through a CVA. Are CVAs the next threat to our High Streets and Shopping Centres?    

  • Related Services

    Portfolio asset management

    Our expert team provides a comprehensive and commercially focussed property portfolio asset management service for investors, retail and corporate occupiers.

    Acquisitions & disposals

    We advise institutional investors, operating businesses, the public sector, estates and private individuals and have experience in acquiring portfolios of properties from administrators or receivers. We have experience in all manner of capital transactions acting for a variety of businesses and individuals with sales and purchases of stand alone or portfolios of commercial properties.

    Property development

    Our team provides specialist expertise in connection with joint venture and partnership arrangements, promotion agreements, the acquisition of strategic land, equalisation agreements and overage/clawback arrangements.

    Property finance

    Whether we are acting for the senior lender, mezzanine funder or the borrower we provide commercially focussed advice aimed at ensuring the deal is completed within the required time frames whilst still protecting our client’s interests. Our role is more than simply knowing the law, it is about applying our knowledge to the deal to get it done.

    Corporate transactions

    Our advice is practical, straightforward and commercial. The breadth of experience ensures the team can advise all companies irrespective of size. We have specific expertise on small business sales and purchases where the property is the main asset.

    Regeneration

    Our clients come from both the public and private sectors. The breadth of experience of our team enables us to give practical advice and anticipate difficulties so ensuring projects are completed efficiently and cost effectively.

    Planning advice

    Our team regularly assists clients on tricky Town and Country planning aspects of development projects and residential / commercial property purchases and sales. We also represent clients on planning / enforcement notice appeal work, both before the Planning Inspectorate and on High Court judicial reviews and statutory reviews. 

    Property disputes including landlord & tenant and boundary disputes

    We represent clients in all forums including the High Court and County Court, Lands Tribunal, and the First-Tier Tribunal (Property Chamber).  All of our property specialists are members of the Property Litigation Association and we have strong working relationships with specialist surveyors and experts, as well as Chancery barristers. Above all, we recognise that the property world is a business in which personal relationships count and we fully address the human as well as the legal dimension of any problem.

Get In Touch

By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

Newsletter Sign Up

General Private Client UpdatesGeneral Commercial UpdatesConstruction UpdatesCourt of Protection UpdatesAgriculture & Rural Affairs UpdatesCommercial Property UpdatesEmployment UpdatesDispute Resolution UpdatesCorporate & Commercial UpdatesCharities & Not for Profit UpdatesFood & Drink UpdatesEducation UpdatesTransport & Logistics UpdatesFamily Business & Owner Managed Businesses Updates

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