LONDON (Reuters) - British department store group Debenhams said former shareholder Sports Direct had withdrawn from a challenge to its rescue plan because it did not have sufficient legal grounds, but the sports retailer would continue to fund the action.
Sports Direct had joined Combined Property Control Group (CPC) in challenging Debenhams’ restructuring, which aimed to secure the group’s survival but came at the expense of shareholders and to a lesser extent landlords and creditors.
Debenhams chairman Terry Duddy said: “As Sports Direct has now acknowledged, it did not have sufficient interest to challenge the CVAs (Company Voluntary Arrangements), as its businesses are not adversely impacted by the proposals and therefore had no legal basis for a challenge.
“However, by continuing to fund CPC’s challenge, Sports Direct is deliberately acting against the vast majority of Debenhams’ stakeholders, including the more than 90% of our creditors who supported our CVAs.”
Sports Direct did not immediately respond to a request for a comment.
Duddy said Debenhams would “vigorously defend” its plan, which would preserve as many as possible of the jobs of the 25,000 people who worked for the company.
Reporting by Paul Sandle; editing by Emelia Sithole-Matarise