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Landlords get go-ahead for legal action against Debenhams

Both firms involved in action regarding two Irish outlets are linked to Roche family

Debenhams on Henry Street, Dublin

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 outlets on Henry Street in Dublin and Patrick Street in Cork.

Permission to bring the proceedings was sought by Heritage Icav, which is the landlord of the Henry Street property, and Kilmaloda Ltd, 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.

In April, Debenhams Retail Ireland Ltd, which had operated 11 stores in the Republic of Ireland and 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 for the two landlords told the court 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.

Unpaid rent

In both sets of proceedings, counsel said the landlords were seeking declarations that the leases had been terminated.

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

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

He said the joint liquidators to the company, Kieran Wallace and Andrew O’Leary of KPMG, were taking a neutral view to the landlord’s applications.

Debenhams’ decision to close its Irish outlets 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 more than €40 million in 2018 and 2019, and was being supported by its UK parent.

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

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