House of Fraser and Sports Direct owner Mike Ashley has submitted a legal challenge to Debenhams’ company voluntary arrangement (CVA), which was approved by the department store’s creditors last month.

However, Debenham’s new owners’ say the claims are “spurious” and the retailer will plough ahead with its debt restructuring process, as planned.

The legal challenge from Mr Ashley is the latest round in his battle with the department store, which was taken over in a pre-packed administration by a syndicate of banks and hedge funds it owed money in April. The deal scuppered Mr Ashley’s attempt to take control of the retail business and wiped out his stake in the company, following an ongoing wrangle with the board.

Mr Ashley’s firm, Sports Direct – which also owns House of Fraser – was entitled to take part in the CVA vote, as it is owed more than £500,000 by Debenhams at the time the CVA was proposed.

Debenhams executive chairman Terry Duddy said: "We believe the challenges to the CVAs to be without merit and will vigorously defend them. Given the overwhelming support for the proposals from creditors, including 80% of landlords, this is an unnecessary distraction as we implement our restructuring plans.”

Meanwhile, a spokesperson for Debenhams’ new owner, Celine UK NewCo 1 Ltd, said: “We note the spurious challenges to Debenhams’ CVA proposals, which were approved by the vast majority of landlords and more than 90% of all creditors. We will move forward with our debt restructuring process, as expected. The CVA provides a platform to deliver a turnaround in the business for which the lending group has committed £200million of new funding and remains supportive.”

As part of the restructure process, Debenhams plans to close at least 22 stores in 2020 and force through rent cuts and changes to lease terms on many others. This is on top of the closure of 50 stores, as previously announced by management in October 2018; reducing the retailer’s portfolio from 166 to 94 by the end of next year.

Stores expected to close in 2020 are: Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton.