Last week the fashion retailer New Look had a CVA approved by its creditors, the terms of which allowed them to write off 6 months of unpaid rent.
The current trend for retailers proposing CVAs is to force landlords into agreeing to link rents to turnover.
Some landlords are arguing that certain retailers are using Covid-19 as an excuse for not paying rent and are worried that this may set a dangerous precedent. It has been reported that several institutional landlords are considering legal action.
Extending the eviction moratorium until the end of the year helps the struggling tenants but causes a major headache for commercial landlords as they are seeing their income streams diminish which puts pressure on those landlords who are highly geared. Major banks are already suffering huge losses because of the demise of Intu.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or to take advantage of our free consultation and business health check, please telephone Stella Flemmings on 01377 257788, 01724 230060 or 01904 520116 and she will make you an appointment with one of our insolvency professionals at our Driffield (East Yorkshjre), Scunthorpe (North East Lincs) or York offices. Meetings can be held virtually or in any of our offices whilst observing the socially distancing guidelines.