Fitness First’s “cram down” restructuring plan has been approved by the High Court.
The gym chain proposed closing 10 of its 44 UK sites and intended to seek rent cuts at many of its remaining sites. Sky News reported earlier this month that a number of Fitness First’s landlords planned to mount a legal challenge to the proposals tabled by the chain.
Mr Justice Michael Green issued an oral judgment approving the plan this afternoon, following a hearing that commenced on Monday this week. A written judgment will be provided in due course.
Dominic Curran, assistant director of the British Property Federation, said: “We support the UK’s rescue culture but are concerned that if restructuring plans are abused they can enable businesses to terminate leases and cut rents with little consultation and limited financial disclosure to justify why they are needed.
“Property owners generally have a good relationship with their tenants and reduced or even waived rent during the pandemic to enable businesses to keep trading and protect jobs. Rents have been rebased over the past decade and leases today will reflect current market conditions.
“Restructuring plans should be a tool of last resort and should only be implemented if there is proper engagement and co-operation with impacted creditors.”
