LONDON, United Kingdom — Debenhams said on Monday that M&G Real Estate had agreed to withdraw the court action related to the British retailer's company voluntary arrangements (CVA) that wiped out investors but kept the company operating.

Debenhams was also challenged in June by former shareholder Sports Direct over its restructuring plan.

"I am pleased that M&G has recognised the necessity for the CVAs," Debenhams Chairman Terry Duddy said, calling on Sports Direct and property firm CPC to do the same.

Debenhams is restructuring the chain using CVAs, which allow retailers to avoid insolvency by offloading unwanted stores, securing lower rents on other stores and reaching a compromise with creditors.

By Noor Zainab Hussai; editor: Edmund Blair.