Bankcrupt who bought BHS for £1

ordered to pay £9.5m into its

Pension Scheme

BHS, a stalwart of the UK High Street for almost 100 years, collapsed in 2016 leading to 11,000 employees losing their jobs and a deficit of £570m on its Staff Pension Fund. The Company had been bought from Retail Tycoon Sir Philip Green for £1.

The Purchaser of the Business, Dominic Chappell has been ordered by the Pensions Regulator to pay £9.5m into its Pension Scheme.

This is in addition to the £363m which Sir Philip Green agreed to pay into the BHS Pension Scheme to avoid the scheme falling into the Pensions Protection Fund and to avoid any potential further action against him.

The Order against Mr. Chappell was made on the basis that he had failed to discharge his responsibilities properly when he owned BHS and operated to the detriment of the Pension Scheme and the many thousands of current and former employees who were entitled to pensions from the fund.

Mr. Chappell was disqualified as a Director for ten years, last year and is also facing a Criminal Trial for Tax offences.

Mr. Chappell purchased BHS via Retail Acquisitions but the Regulator concluded that the acquisition of BHS by Retail Acquisitions and the appointment by him of inexperienced Board members were detrimental to the Staff Pensions Scheme. Investigations also revealed that there was inadequate business planning and that monies were taken out of the Company and distributed to Mr. Chappell and others including family members which again were steps that were detrimental to the Pension Fund. BHS had been owned by Companies controlled by Sir Philip Green for some 15 years prior to its sale to Mr. Chappell during which time it is estimated that the Green family and other shareholders received some £580m from the chain by way of rental payments, interest on loans and dividends.

It remains to be seen whether the Pensions Regulator will have any success in actually recovering monies from Mr. Chappell who was made bankrupt some time ago.

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This document is for information purposes only and does not purport to represent legal advice.  
© O’Rourke Reid 2020