Company voluntary agreements (CVAs) have been hitting the headlines as major high-street names continue to go under. In this article for RICS Nathanael Young looks at whether these arrangements are leaving landlords high and dry, and what the alternatives might be.
CVA's can help reduce the costs of the insolvency process as they are considered to be more flexible.
Company Voluntary agreements used to be a fairly uncommon insolvency procedure. Recently, however, the trickle of cases has become a flood, with big names such as House of Fraser, Carpetright and New Look proposing such arrangements.
The increased popularity of online shopping, business rates, uncertainty over Brexit and a squeeze on household spending have all been putting pressure on the retail sector and the fate of Toys ‘R’ Us and Poundworld show that these are no theoretical concerns.
Whether justifiable or not, CVAs have increasingly become the go-to restructuring tool.
What are the issues for landlords, do they mount legal challenges to them, and are there alternative approaches that might reduce the burdens for landlords? Read more of Nat's article in RICS Property Journal.