Dominic Chappell and Lennart Henningson, former directors of BHS, are facing significant financial penalties after a court ruling.
- Chappell and Henningson have been found guilty of breaching their fiduciary duties at the now-defunct company BHS.
- The duo’s poor management decisions led to BHS’s collapse, causing a substantial £571m pensions shortfall.
- The High Court previously highlighted Chappell’s unsustainable business acquisition strategy without proper capital.
- This legal ruling comes as a significant moment in corporate accountability, addressing wrongful trading practices.
Dominic Chappell and Lennart Henningson, once at the helm of BHS, are now liable for £110 million to creditors due to violations of their corporate responsibilities. These penalties follow the collapse of BHS, which resulted in a massive pensions deficit and job losses for 11,000 employees.
The court determined that Chappell and Henningson continued to trade, disregarding insolvency procedures, which was contrary to their fiduciary obligations. This managerial decision contributed greatly to BHS’s downfall, spotlighting risky corporate conduct.
In June, the High Court outlined Chappell’s acquisition of BHS from Philip Green in 2015, pointing out the absence of a sustainable working capital facility. The court stated there was no prospect of Chappell obtaining necessary capital while he ‘plundered the BHS Group’.
Mr Justice Leech noted that Chappell maintained business operations through an unsound strategy involving costly loans, worsening BHS’s financial troubles. The judge attributed 50% of the resulting losses to Chappell’s actions.
Previously, Chappell was instructed to pay £21.5 million for wrongful trading. Henningson, alongside Dominic Chandler, faced joint liability for an additional £13 million due to similar charges.
The ruling against Chappell and Henningson underscores the importance of accountability and proper corporate governance.
