The private equity owner of TG Jones is facing a major backlash over plans to impose costly rent cuts and store closures on landlords.
Landlords of former WHSmith shops on the high street, trading under the name TG Jones, have hired lawyers in a pushback against what they call an "unacceptable" turnaround plan by Modella.
Property giant British Land, which is leading the charge, has employed law firm Hogan Lovells to put pressure on Modella to soften its proposals.
Modella has warned that TG Jones will run out of cash by the end of June unless landlords dramatically lower their rents or take long payment holidays.
Under its plan, the owners of more than 120 stores at the cash-strapped retailer's 451-strong estate are being asked to sign up for rent holidays, during which they will receive no income for three years. Hundreds more face cutbacks ranging from 15pc to 75pc.
However, it is understood that British Land has filed a notice of objection to its proposal, with support from several fellow landlords including Landsec, M&G and NewRiver REIT.
An executive at one of the landlords, who did not wish to be named, told The Telegraph: "They have been so aggressive that the landlords feel there's no choice but to be aggressive back."
At a court hearing held this week, Mr Justice Smith signalled that any revisions that Modella intends to make to its turnaround plan must be submitted to creditors by June 15, before it is put before a High Court judge for approval on June 29.
A British Land spokesman said: "The scale and structure of Modella's restructuring plan for TG Jones are unacceptable.
"As a creditor, we will not support proposals we consider fundamentally unfair, with deep rent cuts – even on profitable stores – placing a disproportionate share of the restructuring burden onto property owners."
A spokesman for Real Estate: UK, a trade body for Britain's commercial property sector, said: "Several landlord creditors affected by the restructuring plan's proposals are seeking to improve the plan and make it fairer to the affected parties.
"We were pleased that the judge signalled an expectation that TG Jones should engage further with landlords and we hope and expect to see such engagement from the company as a result."
Landsec, M&G and NewRiver declined to comment.
TG Jones's proposals, as well as its failure to pay its tax bills, have provoked the ire of MPs.
Justin Madders, a former employment minister who sits on the business and trade select committee, previously told The Telegraph: "To many people, this will look like heads the investors win, tails the taxpayer loses.
"If workers lose jobs, councils lose revenue and the public is left carrying the cost."
Modella has a track record of presiding over troubled retail assets, having initiated the insolvencies of Claire's Accessories and The Original Factory Shop.
This week it moved to initiate a restructuring process at Wynsors World of Shoes, a move that is expected to result in store closures and more job losses.
A TG Jones spokesman said: "We are aware of concerns raised by a small number of landlords. We have engaged constructively with these landlords.
"The terms of the plan leave landlords no worse off than the alternative."
TG Jones said first-year rental savings would be reinvested into the business and that its "forced name change" had hit its sales.
The spokesman added: "The restructuring plan is vital to the survival of this 234-year-old business, along with the preservation of thousands of jobs."
