Mike Ashley’s Sports activities Direct has launched a last-minute authorized problem to Debenhams’ restructuring plans.
Debenhams rejected two last-ditch takeover affords from Sports activities Direct earlier than the keys to its outlets have been handed over to its lenders.
Now Sports activities Direct has turned to the courts in a bid to overturn an organization voluntary association (CVA) that will see Debenhams closing 50 shops.
Debenhams has referred to as the problem “spurious”.
A CVA is an insolvency course of that permits a enterprise to achieve an settlement with its collectors to repay all or a part of its money owed.
Sports activities Direct mounted its criticism on Monday evening, simply hours earlier than an ordinary 28-day window to attraction towards the CVAs expired.
It adopted a call by Debenhams’ collectors on 9 Might to try to improve the fortunes of the department store chain by closing as many as 50 outlets and aiming to scale back rents on as much as 100 extra.
Earlier than Debenhams’ lenders took management of the agency, Sports activities Direct had been a significant shareholder within the retailer, with about 30% of the agency’s shares.
That stake value about £150m to construct up however was worn out when possession in Debenhams was transferred to its lenders.
Mr Ashley subsequently described the Debenhams takeover by the lenders as a “nationwide scandal”.
In a press release on Tuesday, Debenhams confirmed that Sports activities Direct was considered one of plenty of corporations to have challenged the CVA.
The agency’s government chairman, Terry Duddy, stated: “We consider the challenges to the CVAs to be with out advantage and can vigorously defend them.
“Given the overwhelming assist for the proposals from collectors, together with over 80% of landlords, that is an pointless distraction as we implement our restructuring plans.”
A spokesperson for Celine, the consortium of Debenhams’ lenders that now owns the chain, stated: “We be aware the spurious challenges to Debenhams’ CVA proposals, which have been authorised by the overwhelming majority of landlords and greater than 90% of all collectors.”
“The CVA offers a platform to ship a turnaround within the enterprise for which the lending group has dedicated £200m of latest funding and stays supportive.”
Debenhams is the largest division retailer chain within the UK with 166 shops. It employs about 25,000 individuals.
Sports activities Direct didn’t instantly reply to a request for remark
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