Vol 21 (2024) - Issue 4

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English Court Imposes Multi-Million Pound Liability on Former Directors of BHS for Breach of Directors’ Duties and Wrongful Trading

Synopsis
The English Court issued a 533-page judgement, 1 in June 2024, in the claim brought by the liquidators of British Home Stores, the major UK retailer, against two of its former directors. Upholding the liquidators’ claims, the Court granted the largest-ever UK wrongful trading award and the first-ever award for ‘misfeasant trading’.
The Court examined in great detail the events and decisions surrounding BHS’ acquisition by Retail Acquisitions Ltd (‘RAL’), the subsequent attempts to restructure and refinance the business, and the ultimate failure to secure adequate funding, leading to BHS’ collapse. Unusually, the case against the principal director/shareholder, Dominic Chappell, was ‘severed’ from that against other directors and remains to be determined.