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‘Urgent review needed into CVAs’ as retailers fight for rent cuts

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Landlords believe the insolvency process known as a CVA is being mis-used by companies and is risking deterring investment in UK town and city centres.

The British Property Federation (BPF) said it wanted the government to conduct an ‘urgent’ review in response to a recent “upsurge in CVAs”.

It supports what it called the “proper use of CVAs” in order to help businesses in genuine distress.

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But it added that there is “increasing frustration” about the practice of some recent CVAs.

The federation recommended that CVAs affecting more than five outlets are referred to an independent third party for review.

It also wants The Insolvency Profession and the BPF to work together to codify what is good practice in terms of voting rights and voting structures for CVAs.

Melanie Leech, chief executive, British Property Federation, said that the CVA process is intended to be part of a comprehensive business recovery plan.

“Property owners, looking after savers and pensioners’ money, will support businesses who demonstrate this commitment but must protect those pensioners against unfair action that penalises their interests.

“Urgent action is required and we are calling on government today to undertake a review, so that we can restore the CVA process to its original purpose.”

The British Retail Consortium is reported to have said that retailers only entered a CVA after exploring all other options and would not have taken the decision lightly.

Tags : British Property FederationBritish Retail ConsortiumbusinesscvalandlordsPropertyratesrent
Joe Peskett

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