In an attempt to avoid administration JJB Sports have put a company voluntary arrangement (CVA) together that offers landlords incentives to back the company’s recovery plan.
JJB is proposing to pay half the rent due on 89 of its stores facing closure, as well as a sum for dilapidations. The CVA is estimated to return a range of between 24.6p and 29.3p in the pound to compromised landlords. Administration will only see 1.1p in the pound returned to creditors.
During this ongoing period of economic instability this is an example of where landlords may be prepared to consider offers put forward by struggling tenants to avoid ending up with empty premises. A landlord that for example, agrees to discount the rent for a fixed period of time may give its tenant the breathing space it needs to restructure its finances and prevent the company from going into administration.
JJB Sports’ creditors will vote on the proposals on 22 March.
Sean Logan, Solicitor, Hart Brown
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