Landlords rejoice as Court overturns “unfair” CVA

    View Authors August 2010

    The past eighteen months have seen a marked increase in the use of the Company Voluntary Arrangement ("CVA") by retailers to reduce their lease liabilities and win the release of onerous parent company guarantees, with several high street names going through the process. Although this practice received cautious support from landlords, real concern continues to be voiced over the practice of "guarantee stripping".

    The High Court has just handed down a decision which helps set the boundaries on acceptable practice in this area and provides some comfort for landlords that they will not be bulldozed into accepting unacceptable proposals, simply because they are a minority voice in the proceedings.