Property sector threatened
Landlords affected by closure of 35 PowerHouse stores are launching legal action challenging an arrangement that allows the retailer to exit stores without paying outstanding rent.

The landlords, including Land Securities and Prudential Assurance, believe that if the Company Voluntary Arrangement (CVA) goes ahead they will receive no more than 28 per cent of eight to 12 months rent, while other creditors will be paid in full.

In a statement, the landlords said that the arrangement was potentially damaging to the property sector as a whole. Prudential regional director Peter Best said: 'If this CVA were valid it would have repercussions for the property sector generally in potentially undermining the value of parent company guarantees.

The underperforming stores closed in February and the CVA was drawn up and approved at a creditors meeting on February 17.

The application will be heard by in court on May 9.

PowerHouse is the UK's third-largest electricals retailer owned by PRG Group. It has 53 UK stores.

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