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| BHS liquidator pores over details of Green and Chappell property deals | BHS liquidator pores over details of Green and Chappell property deals |
| (about 1 hour later) | |
| The liquidators of BHS are conducting a detailed investigation into property transactions that took place during the regimes of Sir Philip Green and Dominic Chappell, including whether the directors of the retailer breached their duties. | The liquidators of BHS are conducting a detailed investigation into property transactions that took place during the regimes of Sir Philip Green and Dominic Chappell, including whether the directors of the retailer breached their duties. |
| Insolvency practitioners have a legal duty to review the conduct of the directors of a collapsed company, but the scope and depth of the BHS investigation is rare. | Insolvency practitioners have a legal duty to review the conduct of the directors of a collapsed company, but the scope and depth of the BHS investigation is rare. |
| FRP Advisory is undertaking a “massive exercise in data collation”, according to one source close to the winding up of BHS. | FRP Advisory is undertaking a “massive exercise in data collation”, according to one source close to the winding up of BHS. |
| BHS collapsed into administration last April, leading to the loss of 11,000 jobs and leaving a £571m pension deficit. A parliamentary investigation into the failure of the department store chain concluded that it had been systematically plundered under the ownership of Green and Chappell. | BHS collapsed into administration last April, leading to the loss of 11,000 jobs and leaving a £571m pension deficit. A parliamentary investigation into the failure of the department store chain concluded that it had been systematically plundered under the ownership of Green and Chappell. |
| Green owned BHS for 15 years until he sold it to Chappell, a former bankrupt, for £1. During his ownership, the Green family and other shareholders collected at least £580m from BHS in dividends, rental payments and interest on loans. Chappell’s company, Retail Acquisitions, received payments of up to £25m from BHS despite owning the department store chain for just 13 months until it collapsed. | |
| The parliamentary committee that investigated BHS questioned Green and Chappell about a series of property deals. Green was criticised over the sale by Arcadia, his retail business, of BHS’s shop in Ealing, west London, to a company run by his stepson less than a week before BHS was sold to Chappell. | |
| Brett Palos, who also appeared before MPs during their inquiry, bought the store for £6.9m through his company Thackeray Estates, then sold it for a £3m profit three months later. Chappell also sold BHS’s main warehouse in Atherstone, Warwickshire, for £15m to a company that has one of his friends, Mahmood Ismailjee, as a director. | Brett Palos, who also appeared before MPs during their inquiry, bought the store for £6.9m through his company Thackeray Estates, then sold it for a £3m profit three months later. Chappell also sold BHS’s main warehouse in Atherstone, Warwickshire, for £15m to a company that has one of his friends, Mahmood Ismailjee, as a director. |
| Green told MPs he was not involved the Ealing transaction and that the company had valued the property before selling it. Chappell has insisted he acted properly as a director throughout his tenure at BHS. | Green told MPs he was not involved the Ealing transaction and that the company had valued the property before selling it. Chappell has insisted he acted properly as a director throughout his tenure at BHS. |
| Under British corporate law, the directors of a company have a duty not to sell assets at an undervalue. If a director is found to have breached this duty, he is at risk of being disqualified by the Insolvency Service. Liquidators can also apply to the court to reverse the transaction if it occurred within the past two years. | |
| A spokesman for FRP said: “We will be continuing our process of making recoveries through liquidation on behalf of all creditors and continuing with our statutory duties.” | A spokesman for FRP said: “We will be continuing our process of making recoveries through liquidation on behalf of all creditors and continuing with our statutory duties.” |
| However, the firm revealed more details about its work in a progress report sent to creditors of BHS at the end of November, just before the retailer moved from administration. | However, the firm revealed more details about its work in a progress report sent to creditors of BHS at the end of November, just before the retailer moved from administration. |
| FRP said: “The concurrent administrators [FRP] have commenced their enquiries into a number of historic matters of concern and key transactions, including those raised by the parliamentary enquiry into the company’s failure, and they are working with their legal advisers, Jones Day, to determine appropriate avenues of further investigation. | FRP said: “The concurrent administrators [FRP] have commenced their enquiries into a number of historic matters of concern and key transactions, including those raised by the parliamentary enquiry into the company’s failure, and they are working with their legal advisers, Jones Day, to determine appropriate avenues of further investigation. |
| “It would not be appropriate to comment in detail on the nature and level of the concurrent administrators’ investigations at this juncture. However, within the parameters of the court order, these have included a review of the possible claims and challenges available to an insolvency office holder pursuant to the Companies Act 2006 and Insolvency Act 1986, including those relating to antecedent transactions and wrongful trading.” | “It would not be appropriate to comment in detail on the nature and level of the concurrent administrators’ investigations at this juncture. However, within the parameters of the court order, these have included a review of the possible claims and challenges available to an insolvency office holder pursuant to the Companies Act 2006 and Insolvency Act 1986, including those relating to antecedent transactions and wrongful trading.” |
| FRP was brought in to be the joint administrator to BHS with Duff & Phelps – then the sole liquidator – by the Pension Protection fund, the biggest creditor. | FRP was brought in to be the joint administrator to BHS with Duff & Phelps – then the sole liquidator – by the Pension Protection fund, the biggest creditor. |
| Green, who spent Christmas and new year in Florida, remains in talks with the Pensions Regulator about a settlement for the BHS pension scheme. He has until March to reach a deal before the regulator moves to the next stage of its legal proceedings against him. | Green, who spent Christmas and new year in Florida, remains in talks with the Pensions Regulator about a settlement for the BHS pension scheme. He has until March to reach a deal before the regulator moves to the next stage of its legal proceedings against him. |
| Chappell said the period since BHS collapsed had been “extremely difficult” and that Retail Acquisitions did “everything we possibly could” to save the retailer. | Chappell said the period since BHS collapsed had been “extremely difficult” and that Retail Acquisitions did “everything we possibly could” to save the retailer. |
| “Everybody has been under very close scrutiny,” he said. “We have complied with every regulatory body, of which there is five we have been dealing with. We have been open and frank with them right the way through and living up to our fiduciary care as directors of a business that has failed. | |
| “As it has been stated, we took huge amounts of legal advice right the way through, from the start to the finish of BHS. We complied with every single thing that we needed to do as directors and at no stage did we trade immorally.” | “As it has been stated, we took huge amounts of legal advice right the way through, from the start to the finish of BHS. We complied with every single thing that we needed to do as directors and at no stage did we trade immorally.” |