BPF hits out at New Look’s CVA proposals
The British Property Federation has criticised New Look’s proposals for a company voluntary arrangement, pointing to an “inaccurate reference” that the restructuring reflected its views.
Melanie Leech, chief executive of the BPF, has said the retailer’s CVA plans have failed to meet best practice standards for the insolvency process.
Her comments were made in relation to a statement from one of New Look’s advisers at Deloitte, Daniel Butters, who stated: “We have fully engaged with the British Property Federation and its members, and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.”
The British Property Federation has criticised New Look’s proposals for a company voluntary arrangement, pointing to an “inaccurate reference” that the restructuring reflected its views.
Melanie Leech, chief executive of the BPF, has said the retailer’s CVA plans have failed to meet best practice standards for the insolvency process.
Her comments were made in relation to a statement from one of New Look’s advisers at Deloitte, Daniel Butters, who stated: “We have fully engaged with the British Property Federation and its members, and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.”
Leech said: “New Look and Deloitte have launched this CVA with reference in their communications that the British Property Federation’s views are reflected in the proposal – this is not true.
“While New Look and Deloitte engaged with us and this resulted in some changes to the proposal, this still fails to meet our best practice standards for CVAs and contains terms that property owners will object to.
“CVAs should not be about permanently ripping up leases – they are supposed to be a temporary measure, as part of a wider rescue plan, to get a business back onto its feet.
“Property owners absorb significant losses during a CVA to support a business’s future, and in return expect the support measures within a CVA to come to an end upon termination of the CVA.”
She added: “New Look is using this CVA to permanently rewrite its leases; this proposal is not about a time-limited rescue plan. Property owners are increasingly supporting turnover-based rent models, underpinned by collaboration and transparency, but CVAs should not become a mechanism to enforce this.
“We understand the challenges facing the retail, hospitality and leisure businesses on our high streets, which are at the sharp end of the Covid-19 pandemic. CVAs, however, must not unfairly compromise property owners, who need to consider the impact on their investors, including the millions of people whose savings and pensions are invested in commercial property.”
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