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Debenhams’s liquidator cautioned that while significant progress has been made in discussions with unions over the past few weeks, no agreement has yet been reached.
KPMG said a number of items have yet to be resolved.
In a statement, it revealed that significant costs are being incurred in the liquidation process “… due to the inability to peacefully vacate the stores and carry out the stock, which is due to pickets and protests.”
KPMG added: “The opinion of the Liquidators is that any agreement, if agreed, would be self-financing and in the interest of all creditors, as the costs incurred due to the current situation are eroding the value and the return to creditors.”
He expressed the hope that the liquidators would be able to negotiate two stores, subject to the owner’s consent, to self-finance a large part of the settlement.
Earlier today, there was optimism that an agreement had been reached with the Mandate union that would free up at least 1 million euros to pay additional severance pay for around 1,000 workers who have lost their jobs.
The layoff funds were anticipated to be generated through the sale of shares, which are currently locked inside Debenhams’ 11 closed facilities.
So far, workers have been picketing all 11 stores.
This has prevented the facility from being taken out of stock, as they required enhanced severance pay of four weeks per year of service, rather than the statutory minimum two-week layoff right.
It is understood that under the proposed agreement, pickets would be removed from stores and staff would allow stocks in stores to be marketed from two as yet unspecified Debenhams stores.
To allow that to happen, the liquidator would make an advance payment of € 500,000 and when the sale of the shares is completed, another € 500,000 would be paid.
Additionally, workers would be entitled to an additional 33.3% of any net profit on the sale of shares, and individual workers would get the first preference when buying the shares.
KPMG has said it will continue to work with the unions and expressed its hope that an agreement will be possible.
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