Arcadia CVAs challenged

Arcadia Group has received applications from legal entities of US property firm Vornado, challenging two of its seven planned company voluntary arrangements (CVA).

The challenges, received on Tuesday (16 June), were raised by two landlords of Topshop and Topman stores in New York.

Arcadia CEO, Ian Grabiner, vowed to fight the challenges, describing them as “without merit” and promised that the retail group would “vigorously defend them”.

In June, Arcadia had seven CVA agreements approved by creditors, saving its pension scheme from entering the Pension Protection Fund (PPF).

However, Vornado has decided to challenge the CVA approvals in an objection in a US bankruptcy court. It was one of five US landlords that claimed to have lost more than £100m due to Arcadia closing its US business.

Grabiner stated: “The CVAs are a vital part of our restructuring, putting the business on a firm financial footing and enabling significant investment as part of our growth plans which will ultimately benefit all our stakeholders.

“Our group continues to trade as normal and we remain focussed on delivering our turnaround plans.”

In the CVAs, the firm reached an agreement with the trustees, The Pensions Regulator and the PPF to reduce its deficit repair contributions from £50m to £25m, for three years, alongside security over certain assets totalling £210m.

Owner Philip Green's wife, Lady Green, will provide an additional £100m, consisting of £25m per year for three years and a one-off £25m contribution, to cover the shortfall.

A spokesperson for TPR said: “We note the challenges made to the CVA process by US landlords but will not be commenting further at this stage”.

The PPF, which was only involved in one of the seven CVA's, said that it was "aware of the challenges" against the CVA's and that it "wants to reassure scheme members" of its "ongoing protection".

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