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Small suppliers are to lose at least half the money owed to them by the former WH Smith high street chain if a planned restructure is voted through this week.

The books to paperclips retailer, which has 450 stores, was bought by the private equity firm Modella Capital last year and rebranded TG Jones. It has said it is likely that it will have to call in administrators if creditors, including shop landlords, do not approve an amended restructuring plan, seen by the Guardian, designed to cut costs in votes on Wednesday and Thursday.

Several different classes of creditor are voting over the two days but the plan requires full approval from just one class of creditor and from a high court judge on Monday in order to go ahead.

Dozens of “exit contract” suppliers, which TG Jones does not wish to work with in future, including toy makers and greetings card companies, are expected to have debts owed to them by the retailer wiped out if the proposal is approved. They would retain the right to a share of any profits over a certain level from the retailer – which is now loss-making – in three years’ time.

Under the plan, other suppliers listed by the retail group as “non-core” will receive less than half the money they are owed, with the rest not paid in full for three and a half years. This list includes Help for Heroes but, after the Guardian published an online article highlighting the group’s plight, Modella said it had agreed to repay the veterans charity about £5,700 owed.

One card maker, a long-established supplier to the high street retailer, told the Guardian: “For our business it is a significant write-off.” She said the company had lost out not just on money owed for cards sold but on stock provided on a “sale or return” basis that had been left in stores that are now poised to close. She intends to stop supplying TG Jones.

Another supplier said they were “absolutely broken” by the potential write-off of several thousand pounds, which was “going to hit my family hard [from] which I won’t be able to recover”. “This was my main account, being small-scale,” they said.

Help for Heroes declined to comment but on its website it said that, since partnering with TG Jones’s former owner, WH Smith, in 2014, the retailer had raised more than £71,000 through the sale of Christmas cards with veteran-inspired designs.

The pain for small suppliers comes as TG Jones asks all its suppliers – even large-scale businesses providing products and services it wishes to continue using as “core suppliers” – to take a hit.

Companies, including household names such as Condé Nast, the magazine publisher, Ferrero, the chocolate manufacturer, and Lonely Planet, the guidebook group, will not be repaid money owed in full for a year, with monthly instalments not beginning until six months after the restructure is approved.

Modella, which bought the chain for £76m last year, launched an aggressive restructuring plan last month under which up to 150 stores could close and rents cut on dozens more.

At the time the plan was announced, TG Jones said it owed suppliers £4m.

Modella has said the plan is an “essential part of the company’s turnaround” under which it will invest £35m. The restructure was “designed to protect the substantial core of the store estate and create a stronger, more sustainable business that can continue to serve customers for years to come”.

This week, Modella sent landlords an amendment to the restructuring plan offering improved terms, including a bigger share of any “upside” in future profits resulting from the restructure, in order to try to win their backing. It also promised to pay landlords back for money cut from rents on its most important sites after three years.

The change won over the leading landlord British Land, which had tried to delay the vote on the plan with legal action in order to gain more time to negotiate.

British Land’s lawyers told the high court last week that the TG Jones restructuring plan was a “wholly unfair allocation of the burdens and benefits of the restructuring” amounting to a “naked transfer of value” to Modella, according to a report in Global Restructuring Review trade journal. Other landlords, including M&G, LandSec and NewRiver REIT, are understood to have supported British Land’s position at that point. Their position is now unclear.

However, on Tuesday, British Land said it had withdrawn its opposition to the restructure and would now abstain from voting.

A spokesperson for British Land said: “Following some detailed discussions with TG Jones over the last few days, and a number of material concessions made by the company to mitigate unfairness caused to landlords, British Land has agreed to withdraw its objection to the plan, and will abstain from voting.

“This establishes an important point of principle for restructuring plans, which should not be used to penalise landlords who are providing profitable stores at a fair market rent, all for the benefit of shareholders who won’t invest in the business themselves.”

One landlord told the Guardian: “We would hope to see the plan amended in a more balanced way.”

WH Smith’s travel stores, in railway stations and airports, were not part of the Modella deal and remain owned by its original stock market-listed parent company.

A TG Jones spokesperson said: “We are aware of suggestions made by a small number of landlords in connection with the restructuring plan. We have engaged constructively with these landlords, as we have with other creditors across the estate.

“As a result of that engagement, we have improved the terms of the plan to reflect feedback received. We believe these improvements demonstrate our commitment to achieving a satisfactory outcome for all stakeholders.”