English Court approves Poundland's rescue plan despite landlord resistance

Quick read

On 24 October 2025, the English High Court gave its reasons for sanctioning a restructuring plan (RP) for Poundland Limited, the discount retailer.

Poundland operates about 800 stores and employs 14,600 people. The company's expansion had been unsuccessful, with additional costs eroding profits. By the August 2025 hearing, Poundland was facing imminent insolvency.

Financial and leasehold restructuring

After a competitive sales process, Poundland was sold to Peach Bidco (a Gordon Brothers company), for £1 subject to implementation of the RP.
Poundland's parent company Pepco wrote off £245 million in loans for a 30% stake, contributing approximately £327 million.
Peach injected £95 million, with Gordon Brothers providing specialist turnaround expertise at no cost.
Landlords with profitable stores received full or near-full rent, those with over-rented stores, received rent reductions, nil rent or lease termination, 471 leases were compromised. All landlords retained 'break rights' to exit if better opportunities arose.

Sanction

Despite all but one landlord class voting against the RP, the court used its 'cram down' powers to impose it, finding landlords would receive better returns than in the relevant alternative, administration (a 170% uplift on the Estimated Return plus the prospect of a profit share), and at least one 'in the money' class approved the RP.

The judge applied the same guiding principles summarised in the River Island case (see our alert).

Key takeaways

Engagement counts: The judge recognised the serious attempts of Poundland to engage with its landlords, who didn't appear at the sanction hearing. The company can't be expected to argue the case for absent dissenting creditors.
Differential treatment had a rational basis: The treatment of landlords reflected their contribution to the business's future success. The puzzling opposition from unimpaired landlords suggested factors like block voting influenced the results.
Fair allocation of benefits: The expert 'Allocation of Benefits Report' (only the second such report the court had seen) demonstrated no fundamental unfairness. Overall voting showed more support than opposition and the court was satisfied the plan represented a genuine attempt at a fair solution with no unfair allocation of benefits.