Disputed £30m released to BHS creditors
SIR PHILIP GREEN has lost his battle with BHS’S liquidator over a disputed £30m after it was agreed the money should be made available to unsecured creditors of the collapsed retail chain.
FRP, the retailer’s liquidator, filed a High Court legal claim earlier this month over a contentious £35m floating charge held by Arcadia, the company that holds Sir Philip’s retail empire.
The agreement to release £30m – it is understood that around £5m had been spent on fees and BHS staff wages – will be a significant boost to BHS’S unsecured creditors.
It was feared they could receive as little as 2p in the pound despite losing millions of pounds following the demise of the retail chain. The £35m floating charge initially gave Sir Philip control over the administration proceedings of BHS, including his recommendation to hire Duff & Phelps as administrator, and put him first in line to recover his debts from the collapse.
FRP was hired later by the Pension Protection Fund, BHS’S biggest creditor, after concerns about Duff & Phelps’ close ties with the Topshop tycoon were aired in a Commons select committee inquiry.
In last year’s administrator progress report Duff & Phelps admitted that there was a dispute over a £35m floating charge that had been held by Sir Philip.
A spokesman for FRP said that “the liquidators of SHB Realisations Limited (formerly BHS Limited) reached an agreement with Arcadia in relation to a number of matters, including Arcadia’s floating charge dated April 14 2015. We can confirm that as part of the agreement, over £30m was released from reserves held in relation to Arcadia’s secured claim into the monies available for BHSL’S unsecured creditors and the floating charge is to be released.”
The agreement to release the funds comes before Arcadia would have had to file its defence document with the High Court, which would have required details of its claim being made public.
The agreement between SHB and Arcadia has not included a judgment on whether the floating charge was valid or not, or Sir Philip’s position as an unsecured creditor. An FRP spokesman said that the liquidator was continuing its investigations into the deals leading up to BHS’S collapse.