Landlords of New Look stores have failed in their challenge to a CVA which wrote off rent arrears and imposed turnover rents on hundreds of stores.

Like so many high street fashion retailers New Look was already in a precarious position before the pandemic hit. When its turnover was reduced to nil overnight it projected it would run out of cash without help.

The EAT's judgment

Pre-2006, it was always clear that TUPE applied to transfer employees working in a business when it was bought out of administration. However, changes in 2006 provided that the automatic transfer principle would not apply to any transfer of a business or undertaking where the transferor was the subject of bankruptcy proceedings, which had been 'instituted with a view to the liquidation of the assets of the transferor'.