Struggling retailer Toys R Us could go into administration after being told to plough millions of pounds into its pension fund.
Toys R Us has proposed a deal that could wipe out its pension deficit within a decade in an eleventh-hour attempt to stave off a collapse threatening 3,200 jobs.
It has already announced a plan to close 26 United Kingdom branches for the loss of 800 jobs; this move could see the company's entire workforce of 3,200 on the scrapheap, just in time for Christmas.
All the company's 84 toy stores, along with 3,200 jobs, would reportedly be at risk if the CVA is blocked.
But it is believed Toys R Us does not have enough cash to meet this requirement.
The offer would reduce toys R Us' deficit recovery plan from 15 years to ten years and includes an injection of a sum greater than a planned payment of £1.6m into its pension scheme in January and March.
The PPF is demanding that Toys R Us makes a £9million upfront payment for its defined salary staff pension scheme, which is in shortfall. The parent company filed for Chapter 11, the U.S. version of administration, in September after running up $5bn (£3.7bn) of debts.
PPF is open to changing its vote if Toys "R" Us U.K. comes up with an "acceptable" way of tackling the pension shortfall, it said in a December 19 letter to Field.
Mr Weir added that: "Whatever the outcome of the CVA the pension scheme members can be reassured that they remain protected".
Concerns have also been raised about the write-off of £584.5m in loans owed by a Toys R Us firm based in the British Virgin Islands as part of a group reorganisation previous year and what impact this might have on the pension scheme. We have yet to decide how the creditor rights will be exercised in the CVA vote.
All Toys R Us shops will remain trading through Christmas, but if the CVA is approved, those stores affected will begin closing from the spring.
