Unsecured creditors in BHS will be handed tens of millions of pounds after Sir Philip Green’s high street empire agreed to release the money under a deal with the collapsed chain’s liquidators.
Sky News has learnt that SHB Realisations – the name used by BHS in liquidation – has dropped a legal claim filed at the High Court earlier this month against the tycoon’s Arcadia Group.
The claim is understood to have partly related to a contentious £35m floating charge held by Arcadia dated 14 April 2015.
FRP Advisory, the joint administrator and subsequently the liquidator of BHS, queried that charge last November, seven months after BHS collapsed with the loss of about 11,000 jobs.
It is understood that the agreement between SHB and Arcadia – home to brands like Miss Selfridge and Topshop – does not include any judgment relating to the floating charge’s validity.
Video: Sir Philip Green ‘pays £363m towards BHS pension scheme’
The deal to release £30m from the reserves held in relation to Arcadia’s secured claim will add to the billionaire’s hefty bill for cleaning up the aftermath of what was Britain’s biggest high street failure in a decade.
The £35m sum was initially transferred by Duff & Phelps, the joint administrator to BHS, to Linklaters, Arcadia’s legal adviser, last October.
Following concerns raised by Jones Day, the law firm acting for FRP, however, the funds were returned to Duff & Phelps on 21 November.
Sir Philip’s lawyers had argued that Arcadia’s charge over the £35m was valid – a view shared by Duff & Phelps, which said in an update to BHS’s creditors that DLA, another law firm, had confirmed its legitimacy.
In that report, Duff & Phelps said: “We understand that the concurrent administrators are investigating additional matters which they say may impact on the validity.”
Video: Former BHS boss Dominic Chappell to be prosecuted
The contested funds were subsequently transferred back to FRP following the move into liquidation of the rump of BHS.
Sir Philip’s settlement with SHB avoids the prospect of another lengthy legal battle emerging from the wreckage of BHS.
Dominic Chappell, the former bankrupt to whom Sir Philip sold the chain in 2015, was this week told he faced charges by The Pensions Regulator for allegedly failing to co-operate with its investigation into BHS’s collapse.
Sir Philip also averted the prospect of a protracted fight with the pensions watchdog earlier this year when he agreed to pay up to £363m into BHS’s retirement schemes.
That came after a political row lasting months in which the Labour MP Frank Field led a bitter crusade against the tycoon.
Spokesmen for Sir Philip and FRP declined to comment, while Jones Day, the law firm acting on the legal claim, could not be reached for comment.
Source: Sky News