Kirkland & Ellis is advising Travelodge, the UK’s largest independent hotel brand, on its company voluntary arrangement (CVA), which was approved by creditors on 19 June. The CVA involves Travelodge temporarily reducing rents and moving from quarterly to monthly payments on certain leases. Unlike most CVAs, there are no proposed hotel closures or permanent rent reductions.
The approval of Travelodge’s CVA follows the ground-breaking injunction to restrain a winding-up petition pending Travelodge’s restructuring and forthcoming legislation.
The successful vote will enable Travelodge to navigate the short-term challenges facing the business as a result of the COVID-19 pandemic. The process is now complete, subject to the usual challenge period.
Kirkland is also advising AllSaints, the global contemporary fashion brand, on the restructuring of its store portfolio through parallel CVAs of two English tenant companies. AllSaints successfully obtained recognition in the U.S. and Canada of one of the CVAs, which (if approved by creditors) will compromise the relevant company’s liabilities under leases in the U.S. and Canada. Recognition was obtained under Chapter 15 of the U.S. Bankruptcy Code and the Canadian equivalent (Part IV of the Companies’ Creditors Arrangement Act), on 17 June. If, and when, creditors approve the CVAs, follow-up recognition applications will be made to the U.S. and Canadian courts.
We believe AllSaints’ CVA represents a series of major firsts, including the first U.S. recognition of a landlord CVA, the first Canadian recognition of a CVA, and (if approved by creditors) the first compromise of U.S. and Canadian leases via a CVA.
The Kirkland team for Travelodge was led by restructuring partners Elaine Nolan and Kon Asimacopoulos and litigation partner Richard Boynton. Ian Wormleighton and Dan Butters, of Deloitte LLP, are the CVA supervisors. Tom Smith QC and Henry Phillips, barristers at 3-4 South Square, advised Travelodge on its CVA.
The Kirkland team for AllSaints was led by restructuring partners Elaine Nolan and Lisa Stevens in London, Joshua Sussberg and Neil Herman in New York, and David Seligman in Chicago. Richard Fleming and Mark Firmin, of Alvarez and Marsal, are the CVA nominees.