The Powerhouse CVA, which sought to strip away guarantees provided by the parent company to landlords of Powerhouse, has been struck down as unfairly prejudicial by the High Court. However, certain aspects of the judgement remain unclear and could be subject to future appeal…

BACKGROUND TO THE POWERHOUSE CVA

Powerhouse (an electrical retailer) proposed a CVA on 1 February 2006 with the intention of closing 35 of its stores (the Closed Premises).

The German Government is required by the European Commission ("Commission") to seek repayment of €5.2 million in aid from the bicycle group, Biria. The aid comprised two guarantees and “silent participation” (investor received remuneration but no shares) by a public investment company and the German Land of Saxony to subsidiaries within the Biria group. Although Germany argued that the “silent participation” was provided upon market conditions, the Commission did not accept that it met the private market investor test.