Dominic Chappell has been mandated by the High Court to repay at least £50 million regarding losses suffered by BHS prior to its 2016 collapse.
- The High Court determined that Chappell sought to exploit BHS financially, resulting in significant detriment to the company.
- Chappell acquired BHS for £1 from Sir Phillip Green without securing sustainable capital or any viable prospects.
- Subsequent financial strategies by Chappell were unsustainable, relying heavily on costly loans.
- Chappell shares responsibility for 50% of the losses suffered due to his financial mismanagement.
The High Court has issued a decisive ruling requiring Dominic Chappell to repay a minimum of £50 million to address the financial devastation experienced by BHS before its collapse in 2016. Chappell was accused of deliberately exploiting the company for financial gain, with the court highlighting his opportunistic approach following his acquisition of the retailer from Sir Phillip Green for the nominal sum of £1 in 2015.
Lord Justice Leech described Chappell’s acquisition as lacking any viable financial foundation, noting that he purchased BHS without a sustainable working capital facility or any realistic prospects of acquiring one. The absence of responsible financial support led to reliance on exorbitant loans, which deepened the insolvency situation, culminating in significant losses for BHS.
The court determined that Chappell bore substantial responsibility for these losses, attributing 50% of the financial detriment directly to his actions. Subsequently, he has been ordered to pay £21.5 million for wrongful trading and £17.5 million for breach of fiduciary duty, totalling no less than £50 million including additional costs and interest.
Furthermore, a separate payment is pending against Chappell concerning a misfeasance trading claim, the amount of which will be ascertained in due course. This ruling follows a related legal decision earlier in the month, wherein former BHS directors Dominic Chandler and Lennart Henningson were collectively ordered to pay at least £18 million due to their involvement in wrongful trading and misfeasance.
The case was brought forward by the liquidator FRP Advisory, acting on behalf of BHS creditors, underscoring the court’s commitment to holding former directors accountable for their financial misconduct.
The High Court’s ruling marks a critical step in addressing the financial misconduct that led to BHS’s downfall, with Dominic Chappell held accountable for his significant role.
