Retail property trade body adds voice to clamour against abuse of CVAs
Revo’s president Mark Williams and chief executive Ed Cooke have written to Clive Betts MP, chair of the Housing, Communities and Local Government Select Committee, expressing disquiet at the growing trend for retailers to use CVAs to exit lease liabilities and to demand rent cuts.
They wrote “Every section of our membership has grave concerns about the advice being given to parties seeking to enter into such arrangements, and the detrimental effects felt not only by retail landlords, but by retailers not using this tactic, high streets and retail parks across the UK, and ultimately the wider economy.
And they added: “It is beyond doubt that the process is being abused, with CVAs now being used solely to reduce rental liabilities and terminate lease agreements entered into by owners in good faith. The principle of fairness which underpinned the original legislation has been completely lost in allowing all creditors to vote on a process which in fact targets a single creditor group.
“It is our opinion that CVAs are being aggressively marketed to retailers by consultants and advisors in a way that runs contrary to the legislation’s intention and the wider interests of society. We argue that the financial assumptions made by some advisers and consultants to justify CVA proposals must be scrutinised and challenged. Therefore, we are calling upon you to thoroughly investigate the recent use of CVAs.”