header-logo header-logo

All change for CVAs

16 September 2010 / Siobhan Jones
Issue: 7433 / Categories: Features , Landlord&tenant , Property
printer mail-detail

Siobhan Jones explores the effects of unfair prejudice & “guarantee stripping” in company voluntary arrangements

Company voluntary arrangements (CVAs) have hit the headlines in recent months due to the financial difficulties encountered by relatively high profile retailers. The CVAs proposed by struggling retailers have met with varying degrees of success and a recent case has further limited the scope for companies to use a CVA to enable their guarantors (often a parent company) to avoid liability under the guarantees provided to creditors.

Unfair prejudice

The use of CVAs as a vehicle for “guarantee stripping” has been the subject of much debate in recent years. Guarantee stripping is an example of unfair prejudice which has been of particular concern to creditor landlords whose tenants seek to enter into CVAs which purport to strip away the liabilities of guarantors. A previous high profile case on this point was that of Prudential Assurance Company Ltd & Others v PRG Powerhouse Ltd & Others [2007] EWHC 1002 (Ch), [2007] All ER (D) 21 (May) (Powerhouse).

PRG

If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

CBI South-East Council—Mike Wilson

CBI South-East Council—Mike Wilson

Blake Morgan managing partner appointed chair of CBI South-East Council

Birketts—Phillippa O’Neill

Birketts—Phillippa O’Neill

Commercial dispute resolution team welcomes partner in Cambridge

Charles Russell Speechlys—Matthew Griffin

Charles Russell Speechlys—Matthew Griffin

Firm strengthens international funds capability with senior hire

NEWS
The proposed £11bn redress scheme following the Supreme Court’s motor finance rulings is analysed in this week’s NLJ by Fred Philpott of Gough Square Chambers
In this week's issue, Stephen Gold, NLJ columnist and former district judge, surveys another eclectic fortnight in procedure. With humour and humanity, he reminds readers that beneath the procedural dust, the law still changes lives
Generative AI isn’t the villain of the courtroom—it’s the misunderstanding of it that’s dangerous, argues Dr Alan Ma of Birmingham City University and the Birmingham Law Society in this week's NLJ
James Naylor of Naylor Solicitors dissects the government’s plan to outlaw upward-only rent review (UORR) clauses in new commercial leases under Schedule 31 of the English Devolution and Community Empowerment Bill, in this week's NLJ. The reform, he explains, marks a seismic shift in landlord-tenant power dynamics: rents will no longer rise inexorably, and tenants gain statutory caps and procedural rights
Writing in NLJ this week, James Harrison and Jenna Coad of Penningtons Manches Cooper chart the Privy Council’s demolition of the long-standing ‘shareholder rule’ in Jardine Strategic v Oasis Investments
back-to-top-scroll