Two former directors of BHS, Dominic Chappell and Lennart Henningson, have been ordered to pay £110m to creditors.
- This order comes after a court ruling found them guilty of breaching corporate duties during their tenure.
- The BHS collapse led to the loss of 11,000 jobs and a £571m pensions deficit, impacting many lives.
- The judgement highlighted their decision to keep trading without sustainable financial plans as reckless.
- The court has allocated specific financial liabilities to each director based on their actions.
Dominic Chappell and Lennart Henningson, previously at the helm of BHS, are now obligated to pay £110m to the organisation’s creditors. This significant ruling follows their conviction for breaching corporate responsibilities, a decision that paints a stark picture of their management during a turbulent period for the retail chain.
The collapse of BHS, a retail giant that once employed 11,000 individuals, left not only a workforce without jobs but also highlighted a pensions shortfall amounting to £571m. This financial gap underscored the magnitude of the crisis triggered by the directors’ mismanagement.
A crucial point in the court’s findings was the directors’ decision to continue operations without establishing a viable working capital framework. This risky strategy, described by the court as an ‘insolvency deepening, degenerative strategy of expensive loans,’ was seen as a fundamental failure of duty.
Judge Mr Justice Leech pointed out that Chappell’s actions lacked foresight, accusing him of purchasing BHS without any realistic prospect of securing the necessary financial support. The strategy employed was deemed highly irresponsible, as it solely relied on accruing expensive loans to keep the company afloat.
The court apportioned responsibility such that Chappell is required to pay £21.5m for wrongful trading practices, while Henningson, alongside another director Dominic Chandler, is jointly liable for a £13m wrongful trading payment.
The court’s decision clearly delineates the serious consequences of failing corporate responsibilities, as seen in the BHS case.
