A High Court ruling requires former BHS directors to pay fines for wrongful trading and misfeasance.
- Dominic Chandler and Lennart Henningson have been ordered to pay a combined £18 million.
- The court found directors breached duties, preventing timely insolvency proceedings.
- Retail Acquisitions’ purchase of BHS in 2015 is under scrutiny eight years after its collapse.
- Additional legal actions against other directors, including Dominic Chappell, are ongoing.
The High Court has mandated that former BHS directors, Dominic Chandler and Lennart Henningson, pay a significant fine of at least £18 million following a ruling on their liability for wrongful trading and misfeasance. Each director is required to pay £6.5 million for wrongful trading, with an additional combined payment of at least £5.6 million for misfeasance claims. The decision comes as part of the repercussions following the collapse of BHS into administration, which took place eight years ago.
According to Judge Mr Justice Leech, Chandler and Henningson breached their responsibilities as directors. Their failure to adhere to their duties resulted in the continuation of trading when the company should have entered insolvent administration immediately. The ruling highlights negligence in governance, reflecting a lapse that contributed to the financial decline of BHS.
The transaction under scrutiny involves Retail Acquisitions’ purchase of BHS from Philip Green for £1 in 2015. This acquisition is pivotal to the ongoing financial troubles, which culminated in the company’s eventual collapse. The legal findings underscore the failures in oversight and strategic management during this transitional period.
Additional scrutiny is placed on Dominic Chappell, the founder of Retail Acquisitions, who orchestrated the £1 purchase. While his case is set for a separate hearing, there is potential for him to face an even more substantial financial penalty. It is noteworthy that Chappell was previously ordered to pay £9.5 million into BHS pension schemes in 2020, pointing to continuing legal challenges involving his role.
The case was initiated by BHS liquidator FRP Advisory on behalf of creditors, representing an action to hold the directors accountable for financial misconduct. Current proceedings indicate that the directors may face further fines up to £133.5 million for misfeasance trading, highlighting a rigorous legal pursuit of justice for affected stakeholders.
The legal consequences for former BHS directors reflect the serious breaches in business conduct leading to the retailer’s collapse.
