High Court dismisses Miss Sixty CVA

The High Court has ruled in favour of British landlord Mourant & Co Trustees by setting aside

the company voluntary arrangement (CVA) by retailer Miss Sixty UK Ltd.

The CVA was approved at a creditors’ meeting last year but Mourant, the landlord of the Met Quarter shopping centre in Liverpool, challenged its terms on the premise it unfairly prejudiced its interests.

The judge, Mr Justice Henderson, passing judgment said: “This is, in my view, a CVA that should never have seen the light of day. So far as the applicants are concerned, in their capacity as guaranteed landlords of stores which the Sixty group wished to closes, the evident purpose of the CVA was to compel them to give up their rights for a fraction of their fair value, and to improve the group’s negotiating position by forcing the applicants either to accept the CVA… or to embark on lengthy and expensive proceedings to set it aside, which would itself buy time and subject the applicants to the uncertainties of litigation.”

The judge also ruled that the CVA was “fatally flawed” and slammed the administrators for allowing themselves “to side with the Sixty Group against the interests of the guaranteed landlords of the closed stores.”

International law firm Davies Arnold Cooper, which acted for Mourant, said this should encourage other landlords to challenge the legality of CVAs that unfairly restrict their ability to pursue solvent guarantors.