Dominic Chappell has been mandated by the High Court to repay over £50 million following the collapse of BHS in 2016. A judge ruled Chappell intentionally exploited the retailer, leading to significant financial losses.
- The High Court determined Chappell attempted to exploit BHS after acquiring it for £1 in 2015.
- Judge Leech highlighted Chappell’s lack of a sustainable working capital facility post-acquisition.
- Chappell’s mismanagement resulted in his liability for 50% of the company’s incurred losses.
- Apart from the repayment order, additional claims against Chappell are pending as other former directors face similar rulings.
In a significant ruling by the High Court, Dominic Chappell has been ordered to repay over £50 million to cover the financial losses sustained by BHS following its collapse in 2016. According to the court, Chappell sought to exploit the UK retailer shortly after purchasing it from Sir Philip Green for a nominal £1 in 2015. The decision underscores the serious implications of mismanagement and unscrupulous corporate practices.
Judge Leech stated that Chappell took on the acquisition of BHS without securing a viable working capital facility or any realistic prospects of obtaining such financial backing. The court found that Chappell adopted a harmful strategy, relying on expensive loans that exacerbated the retailer’s financial troubles. In the words of the judge, “he should bear responsibility for 50% of the loss which it suffered as a consequence.” This statement highlights the legal accountability for the financial shortfall experienced by BHS under Chappell’s leadership.
Chappell has been specifically ordered to pay £21.5 million for wrongful trading along with £17.5 million for breach of fiduciary duty, on top of additional costs and interest. This aggregate amount of at least £50 million reflects the court’s determination to hold him accountable for his role in the retailer’s downfall. Additionally, Chappell will face further financial obligations due to a misfeasance trading claim, whose amount will be determined subsequently.
The ruling closely follows a previous decision whereby former BHS directors Dominic Chandler and Lennart Henningson were directed to pay at least £18 million for wrongful trading and misfeasance. These concurrent judgments indicate a systemic failure of corporate governance within the company prior to its collapse, with the liquidator, FRP Advisory, pursuing these cases vigorously on behalf of the creditors.
The High Court’s decision firmly establishes the accountability of Dominic Chappell and other former directors for BHS’s financial collapse.
