(qlmbusinessnews.com Wed. 12th June, 2024) London, UK —

“BHS Collapse: Former Directors Face £18m Payout to Creditors”

Two ex-directors of the defunct British retailer BHS have been ordered to pay a minimum of £18 million to creditors following their involvement in the company's collapse eight years ago.

A court has held Lennart Henningson and Dominic Chandler accountable for wrongful trading and misfeasance in their management of the high street chain.

BHS, which fell into administration in 2016, owed a billion pounds in trading liabilities and pension debts. The company had made headlines when retail magnate Sir Philip Green sold it to former racing driver Dominic Chappell, who had no retail experience, for just £1 in March 2015.

BHS went under just over a year later, resulting in 11,000 job losses and a £571 million pensions deficit. Sir Philip Green faced significant criticism for the saleBHSd their corporate duties by continuing to trade while aware that BHS had no reasonable prospect of avoiding insolvency.

Mr Henningson and Mr Chandler were each ordered to pay £6.5 million for wrongful trading and £5.6 million jointly for misfeasance. They may also face additional fines of up to £133.5 million for misfeasance trading alongside Mr Chappell, who is also facing creditor claims.

Justice Leech will issue a further ruling on any additional amounts owed by Mr Henningson and Mr Chandler later in June.

 

FRP Advisory, acting as liquidator for BHS, brought the case against the directors on behalf of creditors, including the government’s Pension Protection Fund.

Claims against Dominic Chappell will be addressed in a separate hearing this month. The disgraced former entrepreneur was sentenced to six years in prison in 2020 for tax evasion. The court heard that he failed to pay £584,000 in taxes on the £2.2 million income he earned after acquiring BHS, which he used to purchase two yachts, a Bentley, and a holiday in the Bahamas.

A 2016 Parliamentary Select Committee hearing revealed that the collapse of BHS created numerous losers, including around 20,000 current and future pensioners who faced significant cuts to their entitlements. However, it also noted that many of those involved in the decisions leading to BHS's collapse walked away significantly enriched despite the company's failure.

FRP Advisory stated that it has been working to recover money owed to creditors and has made “very substantial recoveries” since 2016.

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