Miss Sixty at centre of debt challenge

Published 19th Jul 2010

Fashion chain Miss Sixty is the focus of a legal challenge that may make it harder to achieve controversial pre-pack administrations that can leave creditors such as landlords out of pocket.

Miss Sixty last year agreed with creditors a Company Voluntary Arrangement (CVA), a legal agreement that has helped retailers such as JJB and Blacks Leisure escape collapse by agreeing to pay just a fraction of their debts.

However, as part of that agreement British commercial landlord Mourant & Co 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 has gone to the High Court and a victory could scupper some future restructuring agreements by making them more legally complex and potentially costly.

After a hearing in the court, a decision is expected by the end of this month.

CVAs work because they promise that the company undertaking the restructuring will satisfy some, but not always all, creditors.

They require a majority of shareholders and creditors to support them.

Source: ' Daily Mail '

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