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| Version 1 | Version 2 |
|---|---|
| Landlords in legal challenge to House of Fraser rescue | Landlords in legal challenge to House of Fraser rescue |
| (3 days later) | |
| A group of landlords is going to court over the rescue plan for House of Fraser saying it treated them unfairly. | A group of landlords is going to court over the rescue plan for House of Fraser saying it treated them unfairly. |
| In June, House of Fraser creditors agreed to a company voluntary arrangement (CVA) - a rescue deal under which 31 stores were closed and rents at some stores were slashed. | |
| The landlords said there was "unfair prejudice" against them in this action. | The landlords said there was "unfair prejudice" against them in this action. |
| House of Fraser said it had not received any formal legal notice from the landlords about going to court. | House of Fraser said it had not received any formal legal notice from the landlords about going to court. |
| "On the assumption that a challenge is filed in court, whilst we are disappointed, we look forward to robustly defending our position and we are confident that this will not affect our commercial plans," a House of Fraser statement said. | "On the assumption that a challenge is filed in court, whilst we are disappointed, we look forward to robustly defending our position and we are confident that this will not affect our commercial plans," a House of Fraser statement said. |
| Advisors to the landlords said in their statement: "It is our view, and that of our legal counsel, that landlords have been disproportionately affected during this CVA process; not only compared to other creditors, but also to how they could have been treated if alternative routes to rescuing the business were fully explored." | Advisors to the landlords said in their statement: "It is our view, and that of our legal counsel, that landlords have been disproportionately affected during this CVA process; not only compared to other creditors, but also to how they could have been treated if alternative routes to rescuing the business were fully explored." |
| Following the rescue deal China's C Banner, which is also the owner of Hamleys, took a 51% stake in House of Fraser. | Following the rescue deal China's C Banner, which is also the owner of Hamleys, took a 51% stake in House of Fraser. |
| C Banner also pledged to invest £70m in the remaining department stores. | C Banner also pledged to invest £70m in the remaining department stores. |
| 'Undesirable leases' | 'Undesirable leases' |
| The landlords hope the legal challenge, which will be heard in a Scottish court, will ensure future deals treat landlords more fairly. | The landlords hope the legal challenge, which will be heard in a Scottish court, will ensure future deals treat landlords more fairly. |
| "CVAs were designed as a means to rescue a business, not simply a tool to shed undesirable leases for the benefit of equity shareholders. | "CVAs were designed as a means to rescue a business, not simply a tool to shed undesirable leases for the benefit of equity shareholders. |
| "The proposals should not be disproportionately detrimental to or prejudiced towards a targeted group of creditors. Our landlord group believes that House of Fraser and its advisors have failed on both counts," the statement said. | "The proposals should not be disproportionately detrimental to or prejudiced towards a targeted group of creditors. Our landlord group believes that House of Fraser and its advisors have failed on both counts," the statement said. |
| Commercial property owners are often pension funds, so the landlords argue that unfair treatment of them has a negative impact on retirement incomes. | Commercial property owners are often pension funds, so the landlords argue that unfair treatment of them has a negative impact on retirement incomes. |