The High Court has ruled against former BHS directors Dominic Chandler and Lennart Henningson, finding them liable for wrongful trading and misfeasance.
- The two former directors are ordered to pay a minimum of £18 million following the legal proceedings.
- Retail Acquisitions, led by Dominic Chappell, purchased BHS for a nominal sum, and further repercussions may follow for Chappell.
- The directors’ breaches of duty were significant enough to suggest that BHS should have entered insolvency sooner.
- The ruling emerged almost eight years post the collapse of BHS into administration.
In a pivotal ruling by the High Court, former BHS directors Dominic Chandler and Lennart Henningson have been found liable for engaging in wrongful trading and misfeasance. As a consequence, they are required to make payments totalling at least £18 million. This decision marks a significant milestone, arriving almost eight years after BHS underwent administration.
The ruling mandates that Chandler and Henningson each pay £6.5 million specifically for wrongful trading, while they must also jointly contribute at least £5.6 million concerning misfeasance claims. Mr Justice Leech articulated that the directors had flagrantly breached their fiduciary duties, and had they adhered to these responsibilities, BHS would have ceased operations and proceeded into immediate insolvency.
Dominic Chappell, the mastermind behind Retail Acquisitions that orchestrated the acquisition of BHS for merely £1, faces future proceedings. A separate hearing scheduled this month could result in him facing even more substantial penalties. It’s noteworthy that in 2020, Chappell was previously ordered to inject £9.5 million into the BHS pension schemes.
Potential repercussions loom large for these directors, with the possibility of encountering fines that may escalate to as much as £133.5 million for their alleged involvement in misfeasance trading. BHS liquidator FRP Advisory pursued the legal case against the directors, acting on behalf of the creditors who sustained losses.
This development signifies a critical juncture, drawing attention to corporate governance and accountability within financial operations, particularly concerning the responsibilities held by directors towards creditors and other stakeholders.
This case underscores the profound implications of corporate governance failures and the accountability directors hold in facing financial mismanagement repercussions.
