Dominic Chappell, former director of BHS, has been ordered by the High Court to repay at least £50 million due to his involvement in the company’s collapse.
- Chappell was found guilty of attempting to ‘plunder’ BHS after acquiring it for £1 without sustainable financial backing.
- He is held responsible for 50% of the losses BHS suffered, amounting to £21.5 million for wrongful trading.
- Additional charges for breach of fiduciary duty add £17.5 million to his repayments, with more to be determined for misfeasance.
- The ruling follows previous judgments against other directors for similar misconduct, highlighting the accountability enforced by the High Court.
Dominic Chappell, the former director of British Home Stores (BHS), has been ordered by the High Court to repay a minimum of £50 million. This decision comes as a consequence of the financial losses BHS incurred before its collapse in 2016. The court’s ruling underscores Chappell’s attempts to ‘plunder’ the company following his purchase from Sir Philip Green for a token sum of £1 in 2015.
The High Court found that Chappell agreed to purchase BHS without securing a sustainable working capital facility, nor having any realistic prospect of obtaining one. Consequently, he resorted to what Mr Justice Leech described as ‘an insolvency deepening, degenerative strategy’ to keep the business afloat, involving costly loans. Chappell is deemed accountable for half of the financial loss BHS endured as a result of his mismanagement.
In specifics, Chappell has been ordered to pay £21.5 million for wrongful trading and an additional sum of £17.5 million for breach of fiduciary duty. These figures encompass not just the losses but also legal fees and interest, pushing the total amount to a substantial figure exceeding £50 million. Furthermore, a separate amount is to be determined later for a misfeasance trading claim.
This ruling is part of a broader effort to hold former BHS directors accountable. Earlier this month, Dominic Chandler and Lennart Henningson, also former directors, were similarly found liable by the High Court for wrongful trading and misfeasance, resulting in a mandate for them to pay at least £18 million.
The case was brought forward by the liquidator FRP Advisory on behalf of BHS creditors, marking a significant step in addressing the financial misconduct of its former executives.
The High Court’s decision highlights the serious consequences of mismanagement and fiduciary breaches in corporate governance.
