Landlords get court's permission for legal actions against Debenhams Irish arm

The High Court has granted two landlords of Debenhams Irish stores permission to bring proceedings against the retailer's Irish arm.
Landlords get court's permission for legal actions against Debenhams Irish arm
Debenhams, Patrick Street, Cork

The High Court has granted two landlords of Debenhams Irish stores permission to bring proceedings against the retailer's Irish arm.

The actions are designed to repudiate the leases of Debenhams stores that had been operated at Henry Street in Dublin and Patrick Street in Cork.

Permission to bring the proceedings were sought by Heritage ICAV, which is the landlord of the Henry Street property and Kilmaloda Ltd is the landlord of the Cork-based premises.

Both firms are linked to the Roche family.

Permission to bring the proceedings was required from the court because the Irish arm of the department store group is in liquidation.

The orders were granted by Ms Justice Niamh Hyland at the High Court on Monday.

Last April Debenhams Retail Ireland Ltd, which had operated 11 stores in the Republic of Ireland and had employed 1,500 people directly and indirectly, announced it was closing down and went into liquidation.

Arising out of that a number of landlords of the 11 premises launched proceedings.

Paul Coughlan Bl for the two landlords told the Court that the premises had been leased to the retailer's parent company Debenhams Plc, which went into administration in the UK in April.

The stores were then in turn subleased to the Irish arm Debenhams Retail Ireland Plc.

In both sets of proceedings counsel said that the landlords are seeking declarations that the leases have been terminated.

Counsel said that his clients are also seeking orders in relation to unpaid rent. The quarterly rent for Henry Street was €1.4m per quarter and €814,000 for the Cork-based store.

Counsel said that it is his client's intention to take back control of both premises and make them available for commercial use as soon as possible.

Counsel said that the joint liquidators to the company Kieran Wallace and Andrew O'Leary of KPMG were appointed as joint liquidators of the company, were taking a neutral view to the landlord's applications.

Debenhams decision to close its Irish stores permanently arose out of its UK-based parent's decision to enter administration and cease providing funding to its Irish subsidiary.

The Irish arm said it had been in financial difficulties for some time.

It incurred losses of over €40m in the years 2018 and 2019, and was being supported by its UK parent.

The company said that the closure of stores, and projected losses caused by the Covid-19 pandemic left it with no option other than go into liquidation.

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