Landlords have been left disappointed after House of Fraser's CVA was passed today, with some even considering legal action.
Creditors threw a lifeline to the department store chain by approving rescue plans that will result in half of the retailer's sites being closed.
Possible legal challenge
Two advisers to a group of the affected landlords said that the result was "disappointing".
Mark Fry of law firm Begbies Traynor and Charlotte Coates of JLL said that landlords' voting power reduced by 75 per cent, meaning "the odds were always stacked against them".
"The landlords now have a 28-day window to consider whether to make a legal challenge against the process and will be looking at their options closely," they said.
The debate isn't over
Another law firm Bryan Cave Leighton Paisner, has also been linked to House of Fraser landlords.
Today Ben Jones, head of restructuring & insolvency at BCLP, said that the approval of the CVA "does not mean that the debate is over".
"Many questions remain including over the fairness of imposing compromises only on landlords and the fairness of the voting weight given to landlords, compared to other creditors, when only landlords are being compromised.
"Bryan Cave Leighton Paisner continue to advise landlords and other stakeholders on their options when they are presented with a CVA."
Defence against the dark arts
The British Property Federation criticised House of Fraser when news of the CVA first emerged, saying that the retailer had not followed usual practice of discussing the plans with landlords.
Melanie Leech, chief executive of the BPF, said that the House of Fraser meeting showed the "dark arts" of how CVA votes are put together.
"Ultimately, confidence is at an all-time low in the process and that needs to remedied as there will be more CVAs," she said.
A threat to the legal system
Revo, an organisation which represents occupiers, landlords, councils and advisers in the retail property sector, has previously called on politicians to take action on the CVA process.
The organisation's president Mark Williams said: “This apparent ease with which some retailers are exiting leases entered into in good faith not only deters companies from investing in our town centres, it fundamentally undermines the UK legal system where contract is sacrosanct."
Time for change
Dan Simms, co-head of retail at Colliers told City A.M. that today could mark a "gear-change" in the perception of the CVA process.
"Because there's a whole perception that they've being used and abused, as well as a few genuine cases, it's really muddying the waters."