US landlords raise questions over debt issues at Arcadia
US landlord Vornado has suggested Philip Green and his Arcadia empire may have manipulated the results of a CVA vote by increasing its debt owed to suppliers.
The retail group and its brands Topshop, Topman, Burton, Dorothy Perkins and Miss Selfridge escaped collapse last week when its unsecured creditors voted to approve a company voluntary agreement.
This allowed it to close stores, including 23 of its UK and Irish stores, and renegotiate rents. The group will also shut all 11 Topshop and Topman stores in the US.
But Vornado has asked Philip Green to explain why the company’s debts to certain suppliers jumped at the time of the second vote, potentially undermining landlords’ power to block it.
Debts to 10 Topshop and Topman suppliers rose by a total £24 million June 7, when Arcadia proposed its revised CVA, and 18 June, the Sunday Times has reported.
Vornado has also asked why an inter-company debt owed by Topshop-Topman to their parent company climbed from £3.7 million to £103.7 million over the same period.
“The accusation is that the CVA culprit is creating an even higher voting right for non-landlords, to force it through,” Adam Coffer of property investor EPF told the newspaper.
The fashion company is facing a legal challenge filed by a group of American landlords, who have question its decision to put its US subsidiary into receivership. The group led by Vornado have accused the company of “engaging in a convoluted scheme” to deprive them of their rights.
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