A group of landlords have expressed concern over Optical Express Group using a controversial pre-pack administration for one its subsidiaries.
Glasgow-based Optical Express Group filed a notice of intention to place its DCM Optical Clinic business in administration on 30 September, stating that it intended to acquire 16 of its 19 stores.
In a letter to administrators Begbies Traynor, the unnamed landlords have queried the use of the pre-pack administration process and are concerned that the administration process is being strategically employed to restructure the business.
The restructuring would result in landlords missing out on three months’ rent when the next quarter’s rent payments are due.
Ian Fletcher, director of policy at the British Property Federation, said: “Administrators are officers of the court that act independently in insolvency situations, but Optical Express seems to think it can dictate the terms of its own subsidiary’s insolvency. We are seeking reassurance from its administrators that is not the case.
“It would be improper use of the insolvency system if companies were able to pick and choose which parts of their contractual commitments they would like to walk away from in order to improve the profitability of their overall business, and leave some creditors with unfulfilled contracts.”
Optical Express, which employs around 1,800 staff, was recently saved from collapse after a deal by chairman and chief executive David Moulsdale, to buy the group’s outstanding debts owed to lender Royal Bank of Scotland after the bank reportedly refused to lend it any more money.
In 2012 the company employed the use of a pre-pack administration for another of its subsidiaries, Optical Express (Southern) Ltd, which operated 80 stores. The company bought back 40 of these stores and the remaining shops were closed.