Prezzo, the high street restaurant chain, is bracing for a court showdown with landlords over the closure of a third of its sites.

Sky News has learnt that Prezzo will write to the owners of its 143-strong estate on Tuesday to notify them of the legal process through which it intends to shut unprofitable stores.

City sources said the chain, which is owned by Cain International, intended to use a formal restructuring plan to force through the overhaul.

Prezzo announced last week that it was axing 46 outlets with the loss of more than 800 jobs.

It said rising energy bills and double-digit cost inflation on items including dough balls and spaghetti had hit the financial performance of many of its sites.

Landlords, who include some of Britain’s biggest commercial property-owners, will be able to vote at a hearing on May 22, according to an insider.

However, the plan is certain to be approved because of Cain’s status as Prezzo’s largest creditor, the insider added.

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The chain’s remaining sites will not be the subject of any rent cuts.

Prezzo’s use of a restructuring plan is likely to be controversial among landlords after the mechanism began being used during the pandemic.

It made no reference to the plan in last week’s announcement about the closures.

Sky News revealed at the weekend that Fitness First, the gym chain owned by JJB Sports founder Dave Whelan, is also planning to take that route to closing sites and imposing steep rent cuts on property-owners.

A restructuring plan can only be used where the alternative outcome is insolvency.

Dean Challenger, chief executive of Prezzo, said last week: “The cost-of-living crisis, the changing face of the high street and soaring inflation has made it impossible to keep all our restaurants operating profitably.

“That is why we have made the difficult decision to close 46 sites where the post-Covid recovery has proved harder than we had hoped.

“We believe the tough decisions we are making today will ensure Prezzo can continue serving communities with high-quality, accessible Italian-inspired meals for many more years to come.”

Prezzo declined to comment on the restructuring plan, on which FRP Advisory is acting.

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