Fashion retailer Miss Sixty is reportedly embroiled in legal proceedings with British landlord Mourant & Co Trustees which could lead to rescue packages such as Company Voluntary Arrangements (CVA) becoming harder to implement.
Miss Sixty was rescued from administration via a CVA last May.
A CVA allows a financially troubled company to reach a binding agreement with its creditors about payment of all, or part of, its debts over an agreed period of time, and therefore avoiding a collapse into full administration.
However, as a result of the Miss Sixty CVA, Mourant Trustees was stripped of the right to ask Miss Sixty’s parent firm in Italy, the guarantor of two leases it had agreed, to pay what was owed by Miss Sixty UK.
Mourant Trustees has gone to the High Court and a win for the landlord could lead to a change in the law, making it more difficult for companies to achieve complex restrucutrings such as CVAs and controversial pre-pack administrations.
A decision is expected by the end of the month.