UPDATE 1: English High Court Reserves Judgment on TG Jones Modified P26A Plans Ahead of £8M July 3 Cash Shortfall; BL Landlords Drop Challenge 

Relevant Documents:
Plan Companies’ Skeleton Argument
BL Landlords’ Skeleton Argument

Mon Jun 29, 2026 11:57 AM ET: The English High Court has reserved judgment on two Part 26A restructuring plans proposed by U.K. stationery and books retailer TG Jones, fka WH Smith. The sanction hearing was uncontested after a group of landlords associated with the British Land, or BL, group dropped its challenge to the plans.

Company counsel pushed for a decision as soon as possible because of the “enormous urgency” of the plans, highlighting a cash shortfall of £7.9 million by Friday, July 3. Justice Hildyard said he will provide a decision not before 10:30 a.m. BST on Wednesday, July 1.

The primary purpose of the plans is to overhaul the lease terms of TG Jones’ 451-store high street portfolio and access £15 million of fresh liquidity from owner Modella to fund a broader turnaround plan.

The plans will also increase an existing asset-backed lending, or ABL, facility, provided by senior secured creditor Aurelius Finance, to £40 million from £35 million currently. The ABL facility will also be extended by 2.5 years to June 30, 2029.

A total of £8.3 million of existing debt will be released under the plans for nil consideration, comprising:
 

• £3.3 million in make whole liabilities owed to the Modella creditor;
• £3.1 million in unpaid license fees from HSL; and
• £1.9 million in unpaid rent from HSL.

The plan companies are TG Jones High Street Ltd., or, HSL, and TG Jones Retail Holdings Ltd., or RHL. HSL essentially runs the day-to-day business, while RHL holds the leases that are set to be compromised under the plans.

Challenge Dropped After Plan Modifications

The plans were originally opposed by the BL landlords who objected to the allocation of the restructuring benefit, arguing that Modella contributing a “relatively small” £15 million to the plans while receiving around 97% of the likely upside is “simply unfair.”

Following negotiations with the BL landlords, the plan companies proposed a number of modifications to the plans, which it says are beneficial to all plan creditors except for Modella.

The modifications to the plans are as follows:
 

• The 75% year one rent reductions for classes A1 to B4, equal to around £9.1 million, which were to be extinguished entirely under the initial proposal, will now be treated as a secured deferral repayable after three years;
• The excess cumulative EBITDA profit share has been enhanced, now offering all eligible creditors a flat 50% of cumulative EBITDA and a lower trigger threshold of £40 million;
• Class C1 dilapidation claims will no longer be compromised if the landlord elects not to exercise their right to terminate the lease prior to the end of the concession window; and
• HSL’s obligation to pay license fees have been waived entirely for the rent concession period, removing around £4.1 million of returns that Modella was set to receive under the original proposal.

In light of these amendments, the BL landlords dropped their formal challenge to the plans and instead abstained from voting during the June 24 and June 25 creditor meetings.

A breakdown of the voting outcome by creditor class is below:
 

Additional Rent Reductions Justify Differential Treatment

While the BL landlords formally withdrew their opposition, they reserved the right to appear in court today to justify the differential treatment of landlord Class A and classes B1 to B4 under the plans.

The BL landlords told the court that the rent reductions in years two and three are all that is required to “plug the drain of the company’s financial performance,” adding that the additional rent reductions in year one, equal to £9.1 million, are effectively a contribution to the group’s cash flow. In these circumstances, the BL landlords say that the year one rent reductions should be treated as a new money contribution under the plan.

In light of this, the BL landlords have asked the court to confirm that the non-pari passu security and repayment rights granted to Class A and B1-B4 landlords in respect of their rent deferral amounts are justified.

An Estates Surveyor for St. Albans council appeared in court with no legal representation or instructing solicitors. He told the court that the council deemed the plan unfair because of rates. “We’re already in arrears for 25/26 and 26/27,” he said, adding “they want our rates plus our rights.”

Background

TG Jones was purchased by Modella and rebranded in 2025. Following the sale, it became clear that many of the company’s existing sites were in need of refurbishment.

Company counsel says in written submissions that the group has faced substantial problems in recent years, which are rooted in macroeconomic factors including high inflation, the shift to online shopping, reduced consumer spending, higher labor costs and increased taxes.

The above headwinds led to a 12% like-for-like reduction in sales since the 2025 sale and rebrand. The plan companies were forecast to run out of cash in April 2026 but managed to survive by, among other things, deferring payment of various liabilities, including by entering a time to pay arrangement with U.K. tax authority HM Revenue & Customs in respect of £8.4 million of tax arrears.

The company says it is receiving daily payment demands that it cannot currently satisfy. Moreover, suppliers are threatening to cease working with the business and have begun imposing restrictive payment terms, giving rise to a “very real” concern that the plan companies might lose critical suppliers, even if the plans are sanctioned.

TG Jones is represented by Tom Smith KC, Jon Colclough and Ryan Perkins. The BL landlords are represented by Ben Shaw KC, instructed by Hogan Lovells.