A store chain specialising in premium nursery products has agreed a company voluntary agreement (CVA) with its landlords.
Creditors of Mamas and Papas, which has 60 outlets in the UK, voted to accept the CVA, which forms part of a wider restructuring plan, on 10 September.
Daniel Butters of Deloitte, who will supervise the CVA with colleague Claire Boardman, said the CVA offered “the best possible solution” for the company and its stakeholders in comparison to the likely alternatives.
He told Insolvency News on 11 September: “The vote in favour of the CVAs enables Mamas & Papas to revise lease terms and proceed with its wider restructuring plan; benefiting creditors, members, employees, suppliers and trade partners alike.
“In addition to securing votes from over 75 per cent of all creditors, for a CVA to be approved a company also needs the support of over 50 per cent of unconnected creditors, of which landlords are the largest group for Mamas & Papas. I am satisfied that the results of the vote represented the best outcome for all stakeholders and will lead to a greater recovery rate for affected landlords.”
According to media reports ahead of the creditor vote, Mamas & Papas had asked for rent reductions of up to 50 per cent and a move to monthly rents as part of the CVA proposals.
A CVA enables a solvent limited company to continue trading, by putting in place an agreement with creditors covering the amount of debt which the company must pay and a payment schedule over a fixed period.
As part of our comprehensive debt and insolvency services, Palmers can advise creditors in deciding which insolvency procedure is most likely to result in the recovery of money owed, including through CVA arrangements. For more information, please contact Andrew Skinner.