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An insolvency agreement is being challenged in the High Court amid fears that
the arrangement could wipe billions off the value of the UK commercial property
market.
Tony Murphy, Corporate Recovery Director at Smith & Williamson, supervised the
disputed company voluntary arrangement for electrical retailer PRG Powerhouse,
entered into on 17 February.
Commercial landlords are challenging the arrangement in the High Court to
prevent Powerhouse avoiding leasing liabilities on 30 closed stores.
Property experts claim that, if other companies were able to discard lease
obligations in a similar fashion, the property industry could see billions wiped
off its portfolio value as a result.
Although Powerhouse’s landlords have accepted the arrangement, some are now
questioning the deal.
Law firm Lovells is representing Prudential, BMW and Richminster Properties Land
Securities, Hammerson, and London Merchant Securities in a bid to revoke the CVA.
The case is expected to be heard in the autumn.
Source:
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