Update: 4 for the price of 2 at BHS

Alan Meek provides an update on the BHS saga.

Following a very public collapse, and a formal inquiry by MP’s into the sale and subsequent failure of the business, the administrators of BHS have been granted an application for additional administrators to be appointed in order to investigate the company affairs in the period leading up to the collapse.

Administrators from Duff & Phelps, were appointed to BHS in April 2016. After failed attempts to rescue the company, the administrators have now announced August 28 as the deadline for the closure of all 57 remaining BHS outlets. This follows the closure of over 100 stores in recent weeks, including the retailer’s flagship store on Oxford Street. It is expected that 11,000 jobs will be lost.

As is by now well‑known, the collapse came just months after BHS was sold by Arcadia Group to Dominic Chappell’s Retail Acquisitions for £1. Since the announcement of the administration, the former owners and directors (and their advisors) have come under fire for their conduct, role in the sale and in BHS’ ultimate demise.

The Court has now granted the request to appoint additional administrators, from FRP Advisory, in order to commence an investigation into the acquisition of BHS by Retail Acquisitions and the conduct of the directors in the period since the acquisition. The application was supported by BHS’ largest unsecured creditor, the Pension Protection Fund (PPF). PPF have an estimated claim of £571m and requested that the Court appoint FRP to work concurrently with the original administrators.

The Court granted the application, holding that the appointment was in the best interests of the creditors as it will enable an investigation in to possible claims against former and current directors in the most timely and efficient manner. It is anticipated by the Court that “real progress will be able to be made in these investigations” before the company goes into liquidation at which time it is understood FRP will be appointed as joint liquidators. The Court was also of the view that “the appointment not materially add to the cost” of the process.

No doubt the outcome of these investigations will be reported at some length.