29 Jun 2016
Policy area: Town centre & Retail
Commercial landlords of BHS stores have been denied the opportunity to form a creditors’ committee as part of the retailer’s administration process.
Reports from the creditors' meeting, which took place last week, say that despite a large number of landlords and other creditors voting for a creditors’ committee, they were overruled by the Pension Protection Fund, that voted against.
A creditors' committee would have provided landlords, many of whose shareholders and pension fund investors will lose millions, to better scrutinise the insolvency and raise any concerns about the conduct of the administration.
The British Property Federation, which represents commercial property landlords and which promotes transparency in the insolvency process, has expressed considerable concern about this latest turn of events. Landlords stand to lose millions of pounds in lost rental income following the administrators' failure to secure a buyer for BHS and the anticipated closure of all its stores, having already agreed a company voluntary arrangement (CVA) to cut rents as part of a failed rescue bid by BHS management.
Ian Fletcher, director of policy (real estate), at the British Property Federation, commented: “In such a controversial and large administration it is staggering that landlords have been denied the chance to form a creditors’ committee, and highly unsatisfactory that the Pension Protection Fund has used its weight in this way. We are astounded that landlords have been denied the opportunity to better scrutinise what is going on.
“Government should want transparency in the insolvency process and this is a huge cause for concern. Complete transparency is of the utmost importance in any administration, and it is extremely disappointing to see this has not been achieved in this of all cases.”