Court decision on Prezzo restructure expected this week
A court decision on Prezzo's restructuring plan that could see almost a third of its restaurant estate close is expected this week.
The casual dining chain said in April it was planning to shut 46 loss-making sites after being hit by rising costs.
Rather than undertaking a Company Voluntary Arrangement (CVA), a restructuring method previously used by casual dining chains including Pizza Express and Wahaca, Prezzo is taking its plan through the courts.
However, Bloomberg reports that HM Revenue & Customs (HMRC) has objected to the plan and argued it is being used to avoid paying tax owed by the business.
A similar restructuring method was used by gym chain Virgin Active in 2021 but proved controversial with landlords who were forced to write off rent arrears and face future reductions in rent.
If approved, the restructure would see the loss of around 800 jobs and leave Prezzo with 97 remaining restaurants.
In April, Prezzo's chief executive Dean Challenger said the cost of living crisis and soaring inflation had made it "impossible" for all the group's restaurants to stay profitable.
Utility bills at the chain have more than doubled while the price of dough balls has risen 15%, pizza sauce 28% and spaghetti 40%, the company said.
A spokesperson for HMRC said it was unable to comment on Prezzo's case due to confidentiality rules.
Prezzo declined to comment.
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