Travelodge has been warned that it could face court action if it pushes ahead with a restructuring to cut rents.
Combined Property Control Group (CPCG), the landlord that brought a legal challenge against Debenhams last year, has accused the hotel chain of penalising property owners while benefiting from government support. Travelodge, owned by hedge funds GoldenTree Asset Management and Avenue Capital, and the investment bank Goldman Sachs, has furloughed staff and has been granted business rates relief.
“The changes the government made were not meant to allow people who have pulled tens of millions a year . . . leaving it with little cash, to plead poverty and tear up leases using strong-arm tactics,” said Ben Rose of Cooper Rose Real Estate, representing CPCG. The landlord owns five hotels.
In a letter, Travelodge has warned that unless it is able to waive up to £146m in rent, it will be forced to pursue a company voluntary arrangement (CVA), a controversial type of insolvency, to slash rents and leave some sites. Landlords have been blocked from taking legal action by the government, which has issued a temporary ban on statutory demands.
CPCG says Travelodge should not pursue a CVA and that a key ruling from the Debenhams case — which found that tenants could not protect their best properties from being taken back by landlords in a CVA — could be a stumbling block.
