The company voluntary arrangement proposed by Manchester-based Flannels was agreed with its creditors yesterday.
Under the CVA, Flannels will close three stores and reduce payment for stock. Amongst the three to close are the store in Liverpool's Metquarter designer shopping centre and the Manchester store located at 55 King Street.
The directors of Flannels finalised the terms of a CVA proposal and appointed Bill Dawson and Daniel Butters from Deloitte's Manchester and Leeds offices respectively as joint supervisors of the CVA on 3 November. The meeting of members and creditors was held at Deloitte's offices in Manchester.
A total of 93 of the creditors who voted were in favour of the proposal with 1 one against. This equates to 89% of creditors by value of claims admitted for voting.
As a result of CVA proposals being approved by the creditors and members of the company, Deloitte said a dividend of approximately 60p in the pound will be repaid to the unsecured creditors, with an uplift of 10p in the pound to 70p in the pound for stock suppliers in recognition of their likely retention of title claims.
Landlords of the 12 continuing stores and the head office have agreed to a 20% discount of the principal rent in 2010 and a 10% discount in 2011.
Landlords of the three stores to be closed will receive a payment of 10% of the remaining rent due under the terms of the lease, with a payment of six months' rent.
The store on the Birmingham Bullring is other one being closed.