A High Court
judge has ruled that the use of company voluntary arrangements (CVA) in
insolvencies unfairly undermines the rights of landlords to receive rents.
The landmark ruling on the case of electrical retailer Powerhouse will make
it harder for parent companies to skirt the rental obligations of subsidiaries
in financial difficulty.
Lawyers have been warning that if investors lost the case, the property
industry would suffer a hit of billions of pounds.
Powerhouse had entered a CVA in order to avoid paying rent on closed stores.
A CVA allows a company to avoid liquidation by negotiating with creditors and
reaching informal agreements.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children