The growing reliance on company voluntary arrangements (CVAs) by struggling retailers is putting healthy companies at a competitive disadvantage, according to critics of the device. CVAs are designed for small businesses and self-employed people who want to avoid paying high prices but still get goods delivered in as short a time as possible. Alix Partners, working on Prezzo’s behalf, said the chain’s like-for-like Landlords are reportedly enraged at how they are expected to take the financial hit from store closures and rent cuts, while bondholders and other creditors are often left untouched because of the rise of what are being called “landlord-only” CVAs, which affect only leases.
The growing reliance on company voluntary arrangements (CVAs) by struggling retailers is putting healthy companies at a competitive disadvantage, according to critics of the device. CVAs are designed for small businesses and self-employed people who want to avoid paying high prices but still get goods delivered in as short a time as possible. Landlords are reportedly enraged at how they are expected to take the financial hit from store closures and rent cuts, while bondholders and other creditors are often left untouched because of the rise of what are being called “landlord-only” CVAs, which affect only leases.