UPDATE 2: Judge Denies Landlords’ Application to Review Debenhams CVA

UPDATE 2: 6:31 a.m. ET 2/13/2020: Landlords seeking to challenge Justice Norris’ order sanctioning Debenhams CVA have been denied permission to appeal by the High Court judge.

The landlords will have to apply directly to the English Court of Appeal to challenge the decision. The parties appeared before the judge on Feb.4, when the landlords, represented by their receivers, made submissions on matters of appeal.

A party can appeal a decision in the English courts if they have a real prospect of success. If the landlords are successful in their appeal, they will be able to unwind the Debenhams CVA. However either party could challenge a Court of Appeal decision in the Supreme Court, which is the highest court in England and Wales.

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UPDATE 1: Justice Norris Reserves Decision in Debenhams CVA Challenge; Landlords Seek Judge's Permission to Appeal

UPDATE 1: 12:18 p.m. ET 2/5/2020: Justice Norris, having heard three days of submissions from Debenhams and the challenging landlords on various consequential matters, retired to form his view on whether the challenging landlords should be given permission to appeal his decision of September of last year. The challenging landlords, who were unsuccessful in their first attempt to unwind the Debenhams CVA, are having their legal fees paid by Sports Direct. 

The judge's decision is expected within the next few weeks and if he denies the landlords permission to appeal, the landlords will petition to the Court of Appeal directly. 

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Original Story 7:18 a.m. UTC on Feb. 4, 2020

Debenhams CVA Landlords Return to High Court for Permission to Appeal Failed Challenge; Company Applies to Strike Out Appeal on Grounds of Receiver Appointment

Relevant Items
Debenhams Skeleton Argument
Directors of Receivership Applicants Argument

Debenhams and the landlords that previously unsuccessfully challenged the retailer’s company voluntary arrangement, or CVA, returned to the High Court in London yesterday for a hearing on Debenhams’ bid to have certain of the landlords’ applications struck out, as they have entered into receivership. The directors of the landlords in receivership are resisting the strike-out application.

The hearing started yesterday and is expected to conclude tomorrow afternoon, with the further matter of permission to appeal to be heard. The landlords previously brought a legal challenge against the CVA process on the grounds that it unfairly prejudiced them. Justice Norris, hearing the appeal, ruled that the CVA, with a minor amendment as to the landlord forfeiture rights, could remain in place.

Debenhams has applied to have the appeal proceedings of The First, Second, Fourth, Fifth and Sixth Applicants (together being referred to as the Discovery Parties) struck out. The retailer argues that Discovery Parties are all subject to insolvency proceedings (whether administration or the appointment of receivers over the relevant properties) such that control of the litigation is no longer within the powers of the directors. It is argued that the administrators and receivers have not authorized the continuation of these proceedings by the directors and do not wish to continue and adopt them themselves.

In response, the First, Second, Fourth and Sixth Applicants (the Receivership Applicants) oppose the strike out application. The Receivership Applicants submit that the company’s position is wrong and that, as a matter of law, the directors have a power to prosecute the CVA Challenge Application on behalf of the Receivership Applicants in circumstances where the receivers have decided not to do so.

Daniel Bayfield QC of South Square represents the Receivership Applicants and Tom Smith QC of South Square represents Debenhams.