What on EARTH? We thought, when the headline in The Times this morning (Tuesday 24 November) grabbed us by loose skin and dragged us to its attention. 'Leon seeks drastic recipe to slim down its rent bill'. What are they doing? Is it the Somalian Liquidation method of forcing debtors to swallow a potion of the mixed blood of its creditors laced with hemlock? Is it putting all of its landlords in a locked room, a la Reservoir Dogs, renaming each of them as a colour and forcing a shoot-out? Just how drastic is 'drastic'?
Turns out, in the biggest disappointment since we heard that J K Rowling was determined to write more 'books' after the end of the Harry Potter series, the 'controversial insolvency procedure' Leon are using is none other than our old friend the CVA. We in the NTI newsroom are pretty sure that our good mates at Quantuma, who took on the job of advising the self-styled 'natural fast-food chain' in June, didn't describe it that way in a briefing document, but none other than The Times said this of the position: 'A CVA is an insolvency process that stops short of Administration and is typically used by leaseholders to secure new rent terms from landlords, sometimes involving the shedding of loss-making stores.'
This is a bit frustrating, as NTI now have to place an emergency stop on the publication of our newly re-written JIEB, CPI and CII manuals, as we thought that an Administration was a procedure undertaken when a company was insolvent and a ground could be proven under para 3.1 of Sch. B1 of the Insolvency Act 1986 when an Insolvency Practitioner replaces company directors and seeks to maximise realisations for creditors. Whereas a CVA is predicated upon a proposal by a company's directors for its continuation to be voted upon by the creditors and members ... nothing to do with directly securing new rent terms to creditors.
Here's one for the Times: a 'journalist' is someone who writes for a website, newspaper or periodical and has a vague notion of what the hell they are talking about. It is further reported across multiple media platforms that Leon's plans are at an early stage and the implications for store closures and jobs have yet to be disclosed. This is journo-speak for 'we have absolutely no idea and very little more news'.
John Vincent, the chief executive of Leon is reported as saying: "As a result of this second lockdown our sales are 70 per cent below last year and this is unsustainable. In light of this, the most likely and constructive way to move forward with our landlords is through the framework of a CVA."
Quantuma are reported as saying very soon afterwards: "Er, shut up, John, we are still putting together the proposal. Could someone please grab Mr Vincent and feed him a self-styled natural food snack and a coffee?"