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| BHS placed into liquidation after pressure from biggest creditor | BHS placed into liquidation after pressure from biggest creditor |
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| BHS has been placed into liquidation following pressure from the Pension Protection Fund, which had argued that shutting down the retailer offered the best option for funding the retirement of former employees. | BHS has been placed into liquidation following pressure from the Pension Protection Fund, which had argued that shutting down the retailer offered the best option for funding the retirement of former employees. |
| The PPF, a government-backed lifeboat for troubled pension schemes, is the company’s biggest creditor and had rowed with BHS’s joint administrator, Duff & Phelps, over the next steps for the failed business. | The PPF, a government-backed lifeboat for troubled pension schemes, is the company’s biggest creditor and had rowed with BHS’s joint administrator, Duff & Phelps, over the next steps for the failed business. |
| Duff & Phelps believed that remaining in administration – where insolvency specialists take over the business – could have boosted overall returns to creditors. But it lost the argument on Friday, as it was announced that FRP Advisory, the other joint administrator, had been put in sole charge of its liquidation. | Duff & Phelps believed that remaining in administration – where insolvency specialists take over the business – could have boosted overall returns to creditors. But it lost the argument on Friday, as it was announced that FRP Advisory, the other joint administrator, had been put in sole charge of its liquidation. |
| In the summer the PPF pressed for FRP Advisory’s appointment alongside Duff & Phelps after it was argued the latter was too close to BHS’s former owner Sir Philip Green. Duff & Phelps were accused of being the retail tycoon’s “ponies” by Dominic Chappell, the former bankrupt who bought BHS for £1 in 2015. | In the summer the PPF pressed for FRP Advisory’s appointment alongside Duff & Phelps after it was argued the latter was too close to BHS’s former owner Sir Philip Green. Duff & Phelps were accused of being the retail tycoon’s “ponies” by Dominic Chappell, the former bankrupt who bought BHS for £1 in 2015. |
| Labour MP Frank Field, who has locked horns with Green over BHS’s fate, said liquidation – where a company’s remaining assets are sold off – offered the “best chance” of recovering cash for the collapsed retailer’s pension scheme. BHS’s scheme had a deficit of as much as £571m at the time of the retailer’s collapse in April this year. | Labour MP Frank Field, who has locked horns with Green over BHS’s fate, said liquidation – where a company’s remaining assets are sold off – offered the “best chance” of recovering cash for the collapsed retailer’s pension scheme. BHS’s scheme had a deficit of as much as £571m at the time of the retailer’s collapse in April this year. |
| “This is another milestone in the collapse of BHS that Sir Philip Green sailed away from,” said Field. “At this stage, though, it is welcome. It gives the PPF’s preferred administrator – rather than Sir Philip’s – the best chance of salvaging some money for the pension schemes.” | “This is another milestone in the collapse of BHS that Sir Philip Green sailed away from,” said Field. “At this stage, though, it is welcome. It gives the PPF’s preferred administrator – rather than Sir Philip’s – the best chance of salvaging some money for the pension schemes.” |
| The administrators’ duties include scrutinising the actions of BHS’s former directors. However it is understood that, seven months on from BHS’s collapse, this investigatory work, which would provide the basis for any legal action to recover funds, is not yet at an advanced stage. The administrators’ report reveals that forensic accountants and lawyers are wading through 4,000 boxes of hard copy records and nearly 200 terabytes of data from BHS’s servers and company laptops. | The administrators’ duties include scrutinising the actions of BHS’s former directors. However it is understood that, seven months on from BHS’s collapse, this investigatory work, which would provide the basis for any legal action to recover funds, is not yet at an advanced stage. The administrators’ report reveals that forensic accountants and lawyers are wading through 4,000 boxes of hard copy records and nearly 200 terabytes of data from BHS’s servers and company laptops. |
| One area FRP Advisory is expected to look at anew is the validity of a £35m floating charge – a security over a loan given to Chappell’s consortium – held in Green’s name. This ranks Green as a secured creditor and would see him get all his money back from the administration proceeds. Duff & Phelps had already judged the claim to be valid. | |
| “We believe the liquidation is the right way to secure the best possible recovery for the pension schemes and other creditors of the insolvent company,” said Malcolm Weir, head of restructuring and insolvency at the PPF. “The liquidator will now be able to progress all remaining issues, including the leases and the ongoing investigatory work.” | “We believe the liquidation is the right way to secure the best possible recovery for the pension schemes and other creditors of the insolvent company,” said Malcolm Weir, head of restructuring and insolvency at the PPF. “The liquidator will now be able to progress all remaining issues, including the leases and the ongoing investigatory work.” |
| As liquidators FRP Advisory have more power to take decisions, including handing back stores to landlords, and in doing so, mitigating the rent that can be claimed out of the general pot for creditors. Even though all BHS stores are empty the company remains on the hook for monthly rental payments. | As liquidators FRP Advisory have more power to take decisions, including handing back stores to landlords, and in doing so, mitigating the rent that can be claimed out of the general pot for creditors. Even though all BHS stores are empty the company remains on the hook for monthly rental payments. |
| At present BHS’s unsecured creditors have been told to expect a maximum of just 8p in the pound from the sale of BHS’s assets. | At present BHS’s unsecured creditors have been told to expect a maximum of just 8p in the pound from the sale of BHS’s assets. |
| “We will be continuing our process of making recoveries through liquidation on behalf of all creditors and continuing with our statutory duties,” said a spokesman for FRP Advisory. | “We will be continuing our process of making recoveries through liquidation on behalf of all creditors and continuing with our statutory duties,” said a spokesman for FRP Advisory. |
| A parliamentary investigation into the demise of the retailer found that BHS had been systematically plundered under its former owners Green and Dominic Chappell. Green, his family and other BHS shareholders collected at least £580m from the retailer, while Chappell’s company Retail Acquisitions was paid an estimated £17m. | A parliamentary investigation into the demise of the retailer found that BHS had been systematically plundered under its former owners Green and Dominic Chappell. Green, his family and other BHS shareholders collected at least £580m from the retailer, while Chappell’s company Retail Acquisitions was paid an estimated £17m. |
| The Topshop owner remains in talks with the Pension Regulator over how to resolve the shortfall in the BHS pension fund. Last month its chief executive Lesley Titcomb told MPs that Green’s assets, including his £100m superyacht, could be seized by the courts if he refuses to comply with a legal demand to cover the £571m deficit. | The Topshop owner remains in talks with the Pension Regulator over how to resolve the shortfall in the BHS pension fund. Last month its chief executive Lesley Titcomb told MPs that Green’s assets, including his £100m superyacht, could be seized by the courts if he refuses to comply with a legal demand to cover the £571m deficit. |
| Titcomb told the work and pensions select committee that a court would determine how to raise funds from the billionaire tycoon, including possible seizure of assets, if he does not pay up when a legal demand is issued, or reach a settlement with the regulator. | Titcomb told the work and pensions select committee that a court would determine how to raise funds from the billionaire tycoon, including possible seizure of assets, if he does not pay up when a legal demand is issued, or reach a settlement with the regulator. |