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Landlords hate Love Coffee CVA
Published:  25 November, 2016

Coffee chain's CVA criticised as ‘very worst example’

The British Property Federation has condemned the Company Voluntary Arrangement proposal by the coffee chain Love Coffee, whose attempts to avoid the terms of its leases are set to leave landlords and local authorities unpaid.

Love Coffee has 29 branches nationwide and has grown rapidly in shopping centres, with sites including:

  • Harpur Centre, Bedford
  • Broadway Shopping Centre, Bexleyheath
  • Pyramids Shopping Centre, Birkenhead
  • The Strand Shopping Centre, Bootle
  • Princess Square Shopping Centre, Bracknell
  • St David’s, Cardiff
  • The Mall at Cribbs Causeway, Bristol
  • Orchard Shopping Centre, Dartford
  • Priory Shopping Centre, Dartford
  • Cheshire Oaks, Ellesmere Port
  • Trinity Leeds
  • Highcross Leicester
  • Lewisham Shopping Centre
  • Manchester Arndale
  • Four Seasons Shopping Centre, Mansfield
  • Walnuts Shopping Centre, Orpington
  • Halton Lea Shopping Centre, Runcorn
  • Crystal Peaks, Sheffield
  • Meadowhall, Sheffield
  • Springfield Outlet Centre, Spalding
  • Merseyway Shopping Centre, Stockport
  • intu Lakeside, Thurrock
  • Peacocks Shopping Centre, Woking
  • Birchwood Shopping Centre, Warrington
  • Westfield London

The BPF called the CVA put forward by Love Coffee a massive step backwards with regards to open and transparent insolvency negotiations, as the company :

  • stopped paying its bills;
  • failed to engage at all with landlords over the terms of the CVA;
  • is selective in its treatment of different classes of creditors, picking and choosing which it is willing to pay;
  • has offered no route for landlords to mitigate lost income, should it return to profitability.

The CVA comes after directors of Love Coffee took out substantial dividends between 2013-14. Whilst further investment is promised in the event that the CVA is approved, there is no guarantee of this or indication of where the additional funding will come from.

Ian Fletcher, director of policy at the British Property Federation, commented: “The CVA put forward by Love Coffee represents the very worst example of insolvency negotiations we have seen, and is unacceptable in its treatment of landlords who have fulfilled their obligations, only to be ignored and left out of pocket. The company also leaves the taxpayer short with unpaid business rates bills.

“The directors of Love Coffee have taken a highly unorthodox, selective approach to deciding which creditors they see fit to pay, and its insolvency practitioner should be scrutinised by their regulators.”