British Property Federation reaction to New Look CVA High Court ruling

10 May 2021, LONDON: Landlords’ High Court challenge to New Look’s CVA took place today – and while the ruling rejected the challenge to this CVA, Justice Zacaroli noted:“There would be strong grounds to conclude it was unfairly prejudicial where a CVA, which compromises the claims of a sub-group of creditors, is achieved only because of the votes of a large swathe of creditors who are unaffected by the CVA, even if there was an objective justification for those creditors being unaffected by the CVA.”
Melanie Leech, Chief Executive, British Property Federation comments:

“While the High Court challenge to New Look’s CVA was unsuccessful, the Judge has sent out a clear message for the future – ‘landlord CVAs’ are unfair, where a CVA asks one sub-group of creditors to absorb significant pain, yet the CVA is approved by a swathe of unaffected creditors. Continual challenges show that CVAs frequently result in unfair outcomes, and the Government must act to make sure insolvency legislation is made fit for purpose and fair to all affected parties.”

Main photo courtesy of Pixabay