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Britain's Debenhams receives Sports Direct challenge to restructuring

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Britain's Debenhams receives Sports Direct challenge to restructuring
Shoppers walk past the Debenhams department store on Oxford Street in London, Britain December 15, 2018. REUTERS/Simon Dawson   -   Copyright  SIMON DAWSON(Reuters)
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LONDON (Reuters) – British retailer Debenhams has received a challenge from shareholder Sports Direct over a restructuring plan that wiped out investors but kept the company operating.

Debenhams is restructuring the chain using so-called company voluntary arrangements (CVAs), which allow retailers to avoid insolvency by offloading unwanted stores and secure lower rents on others and reach a compromise with creditors.

The plan gave creditors control of the company in May, at the expense of investors. Debenhams said on Tuesday it had received challenges to the CVAs from parties including Mike Ashley’s Sports Direct. It said it believes they are without merit.

(Reporting by Kate Holton; Editing by Alistair Smout)

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