Mishcon de Reya Real Estate Managing Associate Mark Reading featured on BBC 5 Live News commenting on Company Voluntary Arrangements (CVAs) as House of Fraser announces the closure of 31 stores through a CVA.
"A CVA is an informal but binding agreement between a company and its creditors. The purpose of it is to allow the company in question to continue trading and to avoid being wound up [when encountering financial difficulty] by rescheduling or postponing the company's debts.
"CVAs are complicated long documents – often running up to 150 pages – and landlords can have just two weeks to consider the intricacies of a CVA before voting on it. Where landlords have multiple stores with a particular tenant – such is the case with House of Fraser – [landlords] don't get to pick and choose the bits of the CVA they support. If they have high performing stores and stores that aren't performing so well, landlords will want to protect the better performing stores and make sure they are able to continue [and will be left with no option but to support the CVA]."
Listen on iPlayer here from 16 minutes and 45 seconds in (clip expires 21 July 2018).