Two former executives of the defunct department store chain BHS have been ordered to pay £110m to creditors for breaching their corporate responsibilities.
The ruling against Dominic Chappell, who led Retail Acquisitions when it bought BHS for £1 from Philip Green in 2015, and Lennart Henningson comes eight years after BHS collapsed with over £1bn in debt, including to its pension fund.
The compensation will benefit creditors and relates to the directors’ failure to place BHS into insolvency when required, thereby neglecting their duties.
Chappell did not attend the June hearing or send a representative. The judge ruled against him, citing no viable defence against the claims.
FRP Advisory, the liquidator for BHS, filed the case on behalf of creditors. It noted that the total amount due from the directors, including penalties and interest, could reach £150m due to Henningson’s delay in settling, The Guardian reported.
Tony Wright, a joint liquidator, said: “We are pleased that the court has found these directors accountable for almost all of the deficit suffered by creditors. It justifies years of effort by the liquidators and the Pension Protection Fund.”
Just a year into Chappell’s ownership, the chain collapsed with the loss of 11,000 jobs and a £571m pensions black hole.
In 2020, Chappell was ordered to pay £9.5m into the BHS pension schemes after he failed in his appeal against a ruling by the Pensions Regulator, which had already secured a £363m cash settlement with Green to rescue the schemes.
Earlier this year, the judge said Chappell tried to “plunder the BHS group whenever possible” and must pay £21.5m for wrongful trading – the largest since the introduction of the Insolvency Act 1986.
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