Partner Michelle Quinn discusses the recent TG Jones restructuring plan and considers the implications for future retailer rescue plans.

Michelle’s article was published in PLC Magazine, 27 August 2026.

It is just over a year since the WHSmith brand started to disappear. Although WHSmith continues to operate separately at airports, railway stations, and hospitals, its 480 high street shop network has been rebranded as “TG Jones” following its acquisition by the private equity firm Modella Capital in June 2025.

In the face of opposition from a prominent group of landlords, the High Court was recently asked to approve radical restructuring plans to avoid the business becoming insolvent. Last month, Mr Justice Hildyard sanctioned the plans, which propose the closure of 150 stores, rent holidays of up to three years at 120 stores, and rent cuts of between 15% and 75% on multiple other properties.

So, how did a historic British retailer become the latest casualty in our much-depleted high streets and what future role might English courts have in determining their fate?

Bargain acquisition

Founded in 1792 by the Smith family in London, WHSmith opened the world’s first travel bookstore at Euston station in 1848. By the late twentieth century, it had become a major global travel retailer with stores in more than 30 countries. But over the first quarter of this century, WHSmith began to struggle, particularly in its domestic high street operations.

By the time of its acquisition by Modella on 30 June 2025, WHSmith agreed to sell the high street operations for only £40 million, half of which was dependent on the level of trading up to August 2026. At the last minute, the price was cut by £12m following “a period of softer trading” and the high street transition of the WHSmith brand to TG Jones, a fictitious family name, had begun.

When hearing TG Jones’ High Court application to approve its restructuring plans, Mr Justice Hildyard had to determine the plans’ fairness – ultimately, whether they would leave creditors no worse off than if the retailer had gone into administration. The retailer argued that the plans were essential for the survival of its business, which was on the verge of insolvency with a substantial immediate cash shortfall. Counsel for TG Jones, Tom Smith KC told the hearing that the business was “highly distressed” and “running on fumes” and would already have run out of cash had it not been for a £10m loan from Modella and a deferral of tax liabilities.

In a summary of his judgment, Mr Justice Hildyard described the plans as “complex in their terms and far-reaching in their effect”. He noted that he was most concerned about the potential financial impact on landlords. But despite an alliance of high-profile landlords vigorously opposing Modella’s proposals, including Landsec, British Land, M&G and NewRiver REIT, the judge was ultimately persuaded that the plans were “objectively, the lesser of two evils” in light of the company’s “trading failures and financial predicaments”.

Aggressive restructuring

Euphemistically, TG  Jones is described as “implementing a holistic restructuring” of its financial and operational liabilities, involving, among other things, “amendments and extensions of certain debt facilities and the restructuring of its leasehold estate and arrangements with its suppliers.”

TG Jones’ CEO, Alex Willson, may describe Modella’s restructuring plan as “punchy”, particularly in relation to the proposed rent holidays and rent reductions but the reality is that the measures go far beyond what that label suggests. Compared with recent retail restructurings, Modella’s restructuring plans for TG Jones are exceptionally aggressive, both in scope and scale.

Unlike historical retail CVAs which focused specifically on the reduction of unsecured landlord rents, usually with temporary rent reductions of 20% to 50%, the TG Jones rescue uses a Part 26A (of the Companies Act 2006) Restructuring Plan in order to force through a cross-class cram-down. This enables a court to force an approving group of creditors to push through a rescue plan irrespective of the objections from an entire dissenting class of lenders or shareholders.

Cross-class cramdowns

A powerful legal mechanism, cross-class cramdowns make it easier for companies to pursue quicker and more aggressive restructurings. They are particularly powerful when renegotiating retail leases, , even if the creditors object. Now firmly embedded in the restructuring landscape, the process enables High Court judges to sanction a company’s restructuring plan and bind dissenting classes of creditors, irrespective of whether they surpass the customary 75% vote threshold for approval of such plans.

In practice, the TG Jones cross-class cramdown therefore overrides multiple dissenting classes of creditors and landlords, significantly reducing supplier debts and zero-rating rents for dozens of properties. The plan cuts rents by between 15% and 75% in hundreds of locations and imposes zero rent for up to three years on more than 100 specific landlord properties.

No longer bound by a 12-month moratorium on store closures, which had been agreed as part of the acquisition, and with its newly approved restructuring in place, Modella is now set to close 150 stores.

Distressed retailers

Founded in August 2022, Modella is a relatively recent arrival in the private equity space.   Part of the Hay Wain Group, this British private equity and investment firm focuses on retail and consumer businesses for turnarounds and restructuring, targeting companies which have an annual turnover between £100m and £3bn. In doing so, Modella has stepped into a perceived investment gap in the medium-sized struggling retail sector, an area most private equity players have steered clear of due to a tough consumer market.

In addition to WHSmith, Modella is best-known for acquiring brands such as Hobbycraft and The Original factory Shop, and most recently, Danish variety retailer Flying Tiger Copenhagen and Polish discount chain Dealz.

Soon after its acquisition, Modella caused The Original Factory Shop, a discount retailer selling diverse products, to enter  a company voluntary arrangement (CVA) in order to reduce rents and close stores.   This was not enough to rescue the struggling retailer and The Original Factory Shop permanently closed all its UK stores in April 2026. The private equity firm also pushed through CVAs and store closures at Hobbycraft within a few months of buying the chain. After repaying its creditors, Hobbycraft successfully made an early exit from its CVA process.

Claire’s Accessories, in which Modella was also involved, did not enjoy the same success, entering successive rounds of administration. Last year, Modella rescued 154 of the company’s stores only for them to subsequently collapse back into administration. But Claire’s Accessories did not proceed with a CVA; instead, its operations entered full administration, resulting in the permanent closure of its standalone stores in April 2026.

Value extraction

In making distressed retail asset acquisitions, Modella Capital uses diverse strategies to extract value, including aggressive restructuring, low-upfront acquisitions, and internal fees. The company’s track record on the UK high street has led to significant scepticism about the TG Jones recovery plan.

Typically acquiring businesses with deferred purchase pricing by deploying minimal upfront capital, Modella ties the balance of the purchase price to future cash flows. In a strategy known as price chipping, it renegotiated the initial purchase valuation of WHSmith downward mid-deal by citing worsening trading conditions. It also charges acquired portfolio companies management and brand licensing royalties, such as extracting a percentage of net revenues from TG Jones.

Modella’s operational restructuring tactics include: closing unprofitable locations and forcing landlords into rent reductions; imposing CVAs or rescue plans that dramatically cut debt to small suppliers and unsecured creditors; enforcing operational overhead limits to squeeze liquidity from smaller high street footprints; closing unprofitable stores; and substantially reducing property rents through High Court-approved restructuring plans, such as TG Jones.

Landlords impact

The High Court approval of the TG Jones restructuring plan allows the company to avoid insolvency and close up to 150 stores.  In sanctioning the plan, Mr Justice Hildyard may have noted the heavy financial impact on landlords when he chose “the lesser of two evils”, but that will provide little comfort to those who are most affected.

Immediately prior to the Court’s approval, Modella offered an 11th-hour concession: landlords will receive 50% of any upside after a three-year period if the combined annual turnover of TG Jones reaches £40m during that time. As a result, the British Land-led revolt against the plan was dropped.

Notably, the scale and scope of the rent holidays and rent cuts in the agreed plan exceeds what landlords have previously faced in earlier retail restructurings. The imposition of three-year rent holidays and rent cuts of up to 75% are certainly more extreme than anything which the market has previously experienced.

Taken together, they fundamentally change the equitable balance of a commercial lease agreement and force landlords to bear a very significant share of the burden. This seems hard to justify when there may be a reasonable prospect of re-letting the properties. But in the current economic climate, smaller landlords often have little choice but to accept.

Future decisions

If this approach were to be sustained in future decisions of the court, there would be broader significant commercial implications, particularly for landlords. Certainly, the precedents set by previous restructuring court rulings are increasingly exposing property owners to a disproportionate financial burden.

It is impossible to predict how much the TG Jones restructuring plan sets a new precedent that may irrevocably alter the balance of power. But having endorsed such an aggressive plan, it sends a clear signal to judges in future: their ultimate priority is to salvage a business if at possible and that the cramdown mechanism can be used to support that approach.

Since High Court decisions are not strictly binding on another High Court judge of equal rank, but instead carry potentially strong persuasive authority, we will have to see what another High Court judge, faced with roughly similar circumstances, decides to do. On past evidence, however, High Court Judges invariably examine past High Court rulings with care and tend to follow them most of the time.

There is a but, however. Given the scale of impact in the TG Jones case, there is a strong argument to suggest that the courts are fast approaching a critical threshold, beyond which the commercial landlord tenant relationship in the retail sector could become severely damaged.  It therefore remains possible that a future court decision may ultimately conclude differently, recognising that the balance has indeed shifted too far.