Retail mogul and Debenhams shareholder Mike Ashley has challenged the high street chain’s plans to restructure the business following its rescue from administration in April.
Debenhams launched a restructure plan in April which would see it close up to 50 stores.
Creditors of the struggling chain have already backed the Company Voluntary Arrangement (CVA) plan which allows retailers to avoid insolvency by offloading unwanted stores, secure lower rents on others and reach a compromise with creditors.
More than 75% of them had voted in favour of the Debenhams’ CVA plan, the company said, which involved rent cuts as well as the closures.
On Tuesday, the retailer said it has now received a challenge from shareholders, including Sports Direct, over a restructuring plan that wiped out investors – and turned the company over to Debenhams’ creditors at their expense last month.
Debenhams said on Tuesday it had received challenges to the CVAs from parties including Mike Ashley’s Sports Direct.
Terry Duddy, Debenhams executive chairman, said: “We believe the challenges to the CVAs to be without merit and will vigorously defend them.”
The new owners of Debenhams, operating under the name Celine UK Newco 1, said: “We note the spurious challenges to Debenhams’ CVA proposals, which were approved by the vast majority of landlords and more than 90% of all creditors.
“We will move forward with our debt restructuring process as expected.
“The CVA provides a platform to deliver a turnaround in the business for which the lending group has committed £200m of new funding and remains supportive.”
Mr Ashley’s challenge to the retailer’s rescue plan follows on from an increasingly acrimonious battle between the Sports Direct boss and the Debenhams board over the future of the 240-year-old company.
Prior to Debenhams falling into administration, Mr Ashley had made a series of offers to refinance the business – conditional on being appointed as chief executive – while also calling for the board to be cleared out.
Sports Direct was contacted for a statement.