Company Voluntary Arrangements: Our action.29 May 2018
Damage is being caused to local communities and the retail industry across the UK by Company Voluntary Arrangements (CVAs).
Every section of our membership has grave concerns about the advice being given to parties seeking to enter into such arrangements, and the detrimental effects felt not only by retail landlords, but by retailers not using this tactic, high streets and retail parks across the UK, and ultimately the wider economy.
It is beyond doubt that the process is being abused, with CVAs now being used solely to reduce rental liabilities and terminate lease agreements entered into by owners in good faith.
Friday 8 June
View coverage in The Express, Retail Week and Drapers.
Tuesday 29 May
View national coverage in The Guardian, The Times, The Sunday Times, The Financial Times and The Telegraph to name but a few.
The principle of fairness which underpinned the original legislation has been completely lost in allowing all creditors to vote on a process which in fact targets a single creditor group.
Furthermore, the misuse of CVAs, which as stated are voted upon by many creditors who are not directly subject to the immediate implications, has a number of adverse consequences for our members and the towns and cities they are invested and operate in:
- Their ease of use leads to an unlevel playing field, penalising solvent retailers who cannot, or will not, re-adjust their cost base in this way;
- In the case of insolvent landlords, the result is a drop in nondomestic rates receipts for local authorities;
- Retail vacancies cause social blight and undermine the Government’s efforts to rejuvenate town centres; and
- Pension funds are among the primary investors in retail property, meaning CVAs have the potential to impact the long term financial wellbeing of a large proportion of the UK population.