propertytalk Live! - Landlords save more than 6,000 jobs by agreeing JJB CVA

propertytalk Live! - Landlords save more than 6,000 jobs by agreeing JJB CVA

The country’s biggest commercial landlords have backed a deal saving more than 6,100 jobs at JJB Sports after the retailer met creditors to seal a company voluntary agreement (CVA) avoiding administration.

However the British Property Federation, representing landlords, said the result should not be seen as a green light for other businesses to exploit CVA rules and dump failing properties, unless they are in genuine difficulty.

The BPF praised JJB’s and advisor KPMG’s transparent dealings with creditors, and said the inclusion of a “clawback” mechanism in the CVA – a dividend that will see affected landlords compensated for some of their losses – should be held up as an exemplar for future deals.

A CVA is essentially a ‘reduce it or lose it’ deal whereby JJB will agree to pay its creditors a proportion of what it owes them. Landlords of JJB fall into three categories under the CVA. Some will see their properties vacated by April 2012; some will have to accept 50% of the rent due to them for two years, and may see their stores closed, and some will see their properties remain open but with rent paid monthly rather than quarterly.