Debenhams

Firms including Freshfields Bruckhaus Deringer, Kirkland & Ellis and Allen & Overy have helped secure a High Court victory for department store Debenhams, after the judge rejected a challenge to a company voluntary agreement (CVA) intended to save it from collapse.

In June, a group of landlords, known collectively as the Combined Property Control Group (CPC) and financially backed by Sports Direct chief executive Mike Ashley, challenged the CVA on the basis that it treated them unfavourably compared to other unsecured creditors.

However, assisted by its top-tier legal advisers, Debenhams successfully argued that the CVA was a valid and enforceable tool, and can even compromise landlords' claims for future rent.

The matter dates back to April, when beleaguered Debenhams fell into the hands of its lenders via a pre-pack administration. With a view to keeping itself afloat, the company agreed a CVA with its creditors the following month.

Freshfields has led for Debenhams throughout the restructuring process. Restructuring partner Ken Baird continues to advise the company on the court challenge, with disputes partner Craig Montgomery also joining the team.

Kirkland restructuring partners Kon Asimacopoulos, Sean Lacey and Partha Kar have been advising a committee of Debenhams' bondholders, who became the lead shareholders following the debt-to-equity swap in April.

A&O is representing the lenders, with finance partner Trevor Borthwick and restructuring partner Nick Lister leading.

Shoosmiths advised the landlords on their challenge, according to the judgment.

Travers Smith, meanwhile, advised CVA supervisors KPMG, and a Baker McKenzie team advised the security trustees.

The fallout around Debenhams follows a wave of financial problems to have blighted the retail sector this year.

Earlier this month, Hogan Lovells picked up a mandate advising minority landlord British Land on its legal challenge against the CVA of Monsoon Accessorize, which filed for one in May. Shoosmiths' Birmingham-based head of restructuring James Keates is advising the company.

Last year, a group of landlords sought to challenge the CVA of department store House of Fraser, though the challenge was dropped before it reached court.