With the Company Voluntary Arrangement (CVA) of House of Fraser reportedly hanging in the balance, the well-publicised difficulties facing the retail sector are widespread. There have been significant criticisms made of CVAs, in particular in relation to complaints that they are being abused to avoid leasehold liabilities relating to unprofitable trading locations.
The House of Fraser CVA was subject to a pending legal challenge to the approval of the CVA on the basis that it was obtained through material irregularity and that its terms were unfairly prejudicial, although a settlement was recently reached before the dispute reached the courts.
One particular concern regarding CVAs is that whilst they prevent creditor…
Read the full article at: https://realbusiness.co.uk/law/2018/08/08/risks-for-a-holding-company-when-subsidiary-goes-insolvent-high-street/