Unpaid rent: Commercial tenant Debenhams closing stores

During the coronavirus pandemic business tenants like Debenhams are under pressure from commercial landlords to pay rent during the pandemic. Commercial landlords have turned to commencing legal proceedings- issuing statutory demands and winding up petitions– to recover debt from tenants for unpaid rent.

We are leading experts specialising in insolvency proceedings. Our experienced City of London solicitors and barristers regularly assist companies facing a winding up petition; individuals served a statutory demand; or creditors owed money and considering issuing a winding up petition

What has happened to Debenhams during lockdown?

The commercial retailer Debenhams has now closed down five of its stores in Hammerson shopping centres leading to potentially 1,400 job cuts due to the failure to agree rent terms with the mall operator. This brings the total store closures to 16 since Debenhams fell into administration last month. Debenhams said in a statement:

“We can confirm that despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres, and so they will not be reopening”

Debenhams

However, Debenhams still continue to engage “constructive talks” with their landlords to agree terms on rent for a vast majority of their stores.

Why are retailers like Debenhams struggling to pay rent?

Many retailers like Debenhams have being issued with winding up petitions by their commercial landlords to recover unpaid rent. Over the last 12 months Debenhams has been in administration two times which has caused the company a huge loss and fall in sales.

In April, an industry body said that British retailers suffered their biggest fall in sales since the 2008 financial crisis in the first half of April as the pandemic forced store closures.

Fashion retailers like Oasis Warehouse Group and Laura Ashley Holdings also went into administration during the UK lockdown.

How can we help you oppose a winding up petition?

As a leading law firm with a track record of success, you can be assured that your matter is in safe hands. Our success rate is a result of the dedication of our lawyers who will diligently review your matter so it has the best possible chance of success from the outset when it matters the most.

If your company is concerned about a winding-up petition or statutory demand from a commercial landlord your company can potentially challenge that petition on the following grounds:

  1. That the debt alleged in the statutory demand or petition to be owing is genuinely disputed on substantial grounds by your company;
  2. Your company has a genuine right of set-off against the creditor that exceeds the amount claimed in the statutory demand; or
  3. In certain other limited circumstances (for example such as jurisdiction, technical or procedural error or delay).

In order to oppose a winding-up petition, you would need to file a witness statement in opposition with the Court no fewer than five business days before the date when the petition will be heard by the Court (rule 7.16 of the Insolvency (England and Wales) Rules 2016). You would also need to provide a copy of that witness statement to the petitioning creditor at least five business days before the hearing.

Your company is entitled to appear at the petition hearing and to oppose the making of a winding-up order. It is usual for companies to instruct solicitors and/or barristers to appear on their behalf at the petition hearing.

Instruct Specialist Insolvency Lawyers

We provide a no cost initial case review to establish whether or not we can help you. We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice.  We are experts in dealing with matters surrounding insolvency in particular issues.  Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules

Want legal advice on defending a winding up petition?

Our simple enquiry form goes immediately to our insolvency team in Middle Temple, London. Call us on +442071830529 from 9am-6pm.

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