A High Court judge has accused administrators from Vantis, now working at FRP, of misconduct over the company voluntary arrangement (CVA) for High Street fashion chain Miss Sixty.
Mr Justice Henderson, the residing judge, was hearing a case from two landlords, who were creditors of Miss Sixty, seeking to stop a CVA they claimed treated them unfairly.
The judge ruled against administrators Nick O’Reilly and Peter Hollis and in favour of the landlords that they were offered inappropriate compensation.
He said: “Unfortunately the administrators in the present case seem to have lost a proper sense of objectivity, and they allowed themselves to side with the Sixty group against the interests of the guaranteed landlords of the closed stores.
“I am conscious, of course, that I have not heard the administrators’ side of the story, because of their decision not to participate in the trial. Nevertheless, I am satisfied that there is a prima facie case of misconduct on their part which ought to be considered by the professional bodies to which they are answerable.
“I therefore propose to direct that copies of my judgment should be sent to the appropriate bodies by which they are licensed to act as insolvency practitioners.”
Peter Hollis, joint supervisor said: “We are of course disappointed with the conclusions reached by Mr Justice Henderson. Throughout the course of the Company Voluntary Arrangement (CVA), there were on-going settlement negotiations between the landlord and the guarantor, and we were advised by our lawyers that it was not necessary for us to take an active role in the Court proceedings.
“We will now work to bring the CVA to a conclusion and will be liaising with all creditors on appropriate next steps.”
In April 2008 Vantis were appointed by Miss Sixty and parent company Sixty SpA to advise it on a potential restructuring. On 29 September 2008 Peter Hollis and Nick O’Reilly were appointed joint administrators.
A creditors meeting to approve the CVA took place on 2 April 2009.
In further remarks Mr Justice Henderson said: “This is, in my view, a CVA that should never have seen the light of day.”
Ian Fletcher, director of policy at the industry body the British Property Federation, added: “The judge’s remarks say it all. It is extremely disappointing that landlords are seen as such soft targets and have to go to such hassle and expense to defend their interests in court. Such a damning judgement can only further erode confidence in the insolvency practitioner sector’s ability to self-regulate itself.
“Over the course of the recession landlords have shown a willingness to support legitimate rescues and what a pity they will be more suspicious in future because of cases like this.”
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