Sports Direct has pulled out of a challenge to store closure plans at Debenhams, but is continuing to back a property company's claim against the process.
In a statement on Monday afternoon, Debenhams said Sports Direct had withdrawn from a challenge to its Company Voluntary Arrangement (CVA), the insolvency process which was approved by creditors in May.
However, Mike Ashley's company is continuing to fund a challenge brought by Combined Property Control Group (CPC) and has agreed to bear any costs incurred by the firm as part of the legal battle.
Debenhams chairman Terry Duddy said: "As Sports Direct has now acknowledged, it did not have sufficient interest to challenge the CVAs, as its businesses are not adversely impacted by the proposals and therefore had no legal basis for a challenge.
"However, by continuing to fund CPC's challenge, Sports Direct is deliberately acting against the vast majority of Debenhams' stakeholders, including the more than 90% of our creditors who supported our CVAs."
He called on CPC to withdraw the action and vowed that Debenhams will vigorously defend its position.
It comes just a day after Sports Direct insisted it would not back down on the challenge, in a statement which said Mr Duddy was "being played by the hedge funds for the puppet he is" and demanded evidence of the retailer's successful turnaround.
Retail landlord M&G also launched a challenge to the Debenhams CVA in June, but agreed to withdraw earlier this month following discussions with the company.
The plans put forward by Debenhams include 50 store closures and lower rents on more than 100 outlets.
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