Be fair, not greedy

Author: | Published: 1 Jul 2009

Elizabeth Fournier
Staff writer

In February Stylo Barratt, the UK shoe-shop owner facing insolvency, offered its creditors a deal. The company voluntary arrangement (CVA) it proposed needed 75% approval to pass, allowing Stylo to continue as a going concern while it restructured its finances. Without an agreement administrators would move in and 5,400 jobs would be lost. The CVA failed, with landlords reluctant to support a deal that subordinated their claim and offered no guarantee of continued tenancy.

But just two months later, sports retailer JJB launched its own CVA, and received over 99% creditor approval at a meeting on April 29. The Arrangement made it through a mandatory 28-day appeal period unchallenged, and new financing arrangements started to be drawn down on June 3. According to all parties involved this was down to the more realistic ambitions of JJB, and the drafting of a document that offered the best...