BPF calls for new rules for retailers ‘abusing’ CVAs
Landlords are urging the government to take immediate action to prevent retailers “abusing” Britain’s insolvency framework.
The BPF has said that retailers and hospitality companies are using CVAs to shift the cost of “years of failings and underinvestment” on to property owners.
The group has written to Lord Callanan, the corporate responsibility minister, demanding tougher rules.
Landlords are urging the government to take immediate action to prevent retailers “abusing” Britain’s insolvency framework.
The BPF has said that retailers and hospitality companies are using CVAs to shift the cost of “years of failings and underinvestment” on to property owners.
The group has written to Lord Callanan, the corporate responsibility minister, demanding tougher rules.
According to the BPF, there were 33 CVAs where landlords took the brunt of the pain last year, up from 11 the previous year.
“While the crisis has brought genuine hardship to businesses up and down the country, it has also been cynically used as an excuse by wealthy individuals and private equity backers to shift on to property owners the cost of years of failings and under-investment,” Melanie Leech, chief executive of the federation, said in the letter.
“As well as being fundamentally inequitable, such CVAs are damaging to the high street, hurting pensioners and savers and undermining the UK’s reputation among international investors.”
The BPF urged the government to “ensure that the voting procedure is fairer to those that the CVA compromises by giving their votes greater weight than the votes of unaffected creditors”.
It also called for a requirement to independently scrutinise all CVAs, by bodies such as the Pre-Pack Pool; to ensure CVAs can no longer enforce permanent changes to contracts; and to double the notice period for creditor meetings to 28 days.
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