Arcadia wins cash battle with US landlords
A clutch of American landlords have lost their battle to recoup losses after Topshop USA’s bankruptcy filing. It means Topshop parent Arcadia can move the cash raised by its liquidation sales at its 11 US stores back to the UK, along with funds that had been frozen in its American bank account.
The landlords, who included property giant Vornado, aimed to get back over £100 million and argued that Arcadia’s series of company voluntary arrangements (CVAs) compromised their rights as foreign creditors.
Arcadia’s win means that it can now use the money to repay some creditors affected by its CVAs.
It’s not the end of the story though as the court also ruled that the US landlords’ case could be submitted in UK courts and Vornado has already said that it plans to challenge Arcadia’s CVAs, although there’s a deadline of July 15 if it still intends to do this.
Vornado is clearly unhappy at what has happened with Topshop’s US operation and last month suggested Arcadia boss Philip Green and his business could have manipulated the results of the CVA vote. It said the group’s debts to certain suppliers spiked at the time of the decisive CVA vote, potentially undermining the ability of other creditors, such as some landlords, to block it.
Arcadia’s US entity filed for bankruptcy in the US under chapter 15 of the bankruptcy code (the section of the code that deals with foreign insolvencies) back in May.
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