In the recent case of TG Jones High Street Limited [2026] EWHC 2079 (Ch), the High Court gave its reasons for sanctioning two plans for the restructuring of the TG Jones group – the high street business formerly operated by WH Smith, acquired by Modella Capital in 2025. Only one of the landlord classes on the main plan approved it by the required majority. In three classes, most of those voting were against. The court imposed the plans anyway. B P Collins’ property disputes team acted for one of the landlords in the restructuring.
For landlords the headline will feel familiar: rent is cut, the lease is rewritten, and a majority vote against makes no difference. Regardless, the detail of the case is worth reading because it shows something more useful than that: the landlords who organised early and engaged with TG Jones came away with materially more than those who simply voted no.
What a restructuring plan can do to a lease
A restructuring plan under Part 26A of the Companies Act 2006 allows a company in financial difficulty to compromise what it owes. Creditors are divided into classes and each class votes, with a 75% majority by value required. However, the feature that really matters for landlords is ‘cross-class cram down’. Under section 901G the court can sanction a plan over the opposition of an entire dissenting class, provided two conditions are met: 1) that the dissenting class would be no worse off than under the relevant alternative; and 2) that at least one class with a genuine economic interest has approved it.
That is the landlord’s difficulty in a sentence. A CVA could already cut rents and treat different categories of store differently. What a restructuring plan adds is that a landlord class which votes against can still be bound. Collective opposition no longer blocks the deal.
The comparator does most of the work
The relevant alternative (to the restructuring plan proposed by TG Jones) was a trading administration, with stock sold off and the remaining assets realised piecemeal. On the expert evidence, landlords would have recovered between 6.3p and 15.3p in the pound in that scenario, depending on which category of store their lease related to. Set against a comparator of that kind, almost any plan leaves a landlord better off, and the ‘no worse off’ test is satisfied without much difficulty.
The practical lesson is that arguing about the plan in isolation is usually a losing position. The arguments that have traction are about the comparator itself – whether administration really is what would happen, and whether the valuation and timing assumptions behind the recovery figures are sound. That is largely a contest of expert evidence, and a landlord who wants to run it needs its own valuation and property evidence early, because the timetable between the convening and sanction hearings is short. The other argument is fairness, to which we come next.
How the leases were treated
The plans did not treat landlords as a single group. Stores were grouped according to the economic performance of the business at each site, producing ten separate landlord classes on the main plan with markedly different outcomes.
91 leases were excluded from the plans altogether and left untouched. For the stronger classes, 25% of the rent was payable in the first year of a three-year concession period, rising in years two and three – to full rent for the best-performing stores, but to as little as half for others. For the weakest classes, no rent was payable in the first year, and for one class nothing for the whole concession period. Every compromised landlord was given the right to terminate its lease.
Differential treatment of that kind is not new and is not, by itself, objectionable. The court accepted that the differences between the landlord classes reflected the relative performance of the business at the various premises. The question is whether the differences can be justified, not whether they exist.
Organised opposition still works
The most instructive part of the case for landlords is what happened between the convening hearing and the sanction hearing. A group of landlords led by British Land opposed the plans as originally formulated. After the convening hearing, negotiations continued, with proposals and counterproposals exchanged. On 23 June 2026 a settlement was reached under which the British Land group agreed not to vote against the plans. The plans that were ultimately sanctioned were not the plans first put forward.
Two significant modifications came out of those negotiations:
- First, the first year rent reductions for certain landlords were deferred rather than extinguished, so that the balance remains payable, and security was created for the deferred sums.
- Second, the upside sharing mechanism was substantially improved. As originally proposed, eligible creditors would have received 12.5% or 25% of cumulative EBITDA above thresholds of £47.5m and £64.2m. As modified, they receive 50% of cumulative EBITDA above £40m over the financial years 2027 to 2029. The court described that as generous in comparison with earlier landlord plans: the equivalent figure was up to 25% in Poundland, and 12.5% to 25% in Poundstretcher and Iguanas.
Most landlord classes still did not reach the 75% threshold, and the court still had to use its cram down power. But the terms those classes were bound by were considerably better than those originally proposed. That improvement was negotiated, not litigated.
What the shareholder puts in
Modella kept its equity while creditors took a compromise. The court accepted that. It was not practicable to grant illiquid (which is an asset that cannot be quickly or easily sold) equity in an unlisted company to a very large number of landlords, suppliers and local authorities; the equity was valued at between nil and £3m; and Modella was releasing debt, extending its facilities to mid-2029, and providing a £10m facility and £15m of new money.
Expect this to be the battleground in future cases: where shareholders keep the business while landlords give up rent, the court will look closely at what the shareholders are putting back in.
What this means in practice
Before the plan is voted on
- Check whether your lease is in scope at all. 91 leases were excluded from these plans entirely. That is the first thing to establish.
- Engage at the convening hearing, not the sanction hearing. Class composition is settled early, and the composition of the classes largely determines the outcome of the vote. Objections raised for the first time at sanction are much harder to run.
- Organise with other landlords. A single landlord in a class of 80 or 100 leases has very little leverage. A group with its own advisers has a great deal, as this case shows.
- Attack the relevant alternative. The recovery figures in the comparator are the foundation of the whole plan. They rest on valuation and timing assumptions which are capable of being tested.
- Look past the headline rent figure. Deferral, security for deferred sums, upside sharing, termination rights and the length of the concession period are all capable of negotiation, and in this case deferral, security and the upside share all moved. Check too whether service charge and insurance rent are reduced with the principal rent or remain payable in full – in a multi-let building that can make a substantial difference. The plan must be read alongside the lease.
- Check what the plan does to your other remedies. A plan is concerned with rent, but the lease contains much more: repairing, user, alienation and keep-open covenants among them. Establish which obligations continue to bind the tenant, and whether the plan restricts forfeiture or other enforcement during the concession period.
- Take advice early on guarantees and third party liabilities. A plan compromises the tenant’s obligations. Whether anything survives against a guarantor, a former tenant or under a rent deposit deed is a question to raise at the outset, not after sanction.
- Tell your lender. A reduction in rent can affect the value of the property and the covenants in your facility agreement. Many facilities require prompt notification of an event of this kind.
Once the plan is sanctioned
- Think carefully before exercising a termination right. In TG Jones every compromised landlord was given one. Whether to use it is a property decision rather than a restructuring one. It turns on reletting prospects, the likely void period, empty rates once any relief has run out, insurance and security for an empty unit, and whether any dilapidations claim survives. Taking the unit back can leave a landlord worse off than accepting the reduced rent.
- Plan for the end of the concession period. The plans also gave the company an exit right at the end of the concession period for some leases. Where a lease is protected by the Landlord and Tenant Act 1954, the rent on any renewal is assessed by reference to the open market, so the concession rent does not carry forward into a new lease.
Get in touch
Our property disputes team advises landlords and property owners on tenant insolvency, including restructuring plans and company voluntary arrangements, forfeiture and recovery of arrears, guarantees and rent deposits, and dealings with administrators and liquidators. If your tenant has proposed a restructuring, the earlier we are involved the more can usually be done, contact Elliott Brookes or a member of the property disputes team on 01753 889995 or email enquiries@bpcollins.co.uk.
The team’s ethos is simple: solve the problem.
