The BHS liquidator has confirmed it has reached a deal with Sir Philip Green’s high street empire to release £30m to unsecured creditors to the collapsed retail chain.
A spokesman for the liquidators at FRP Advisory confirmed that it had reached agreement with the tycoon’s Arcadia group “in relation to a number of matters”, a day after the deal was first reported exclusively by Sky News.
It sees SHB Realisations – the name used by BHS in liquidation – drop a legal claim filed at the High Court earlier this month.
That claim partly related to a contentious £35m floating charge held by Arcadia dated 14 April 2015.
The spokesman for the liquidators said: “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 (BHS Limited’s) unsecured creditors and the floating charge is to be released.”
FRP, the joint administrator and subsequently the liquidator of BHS, had queried the floating charge last November, seven months after BHS collapsed with the loss of about 11,000 jobs.
It is understood that the agreement between SHB and Arcadia – home to brands such as Miss Selfridge and Topshop – does not include any judgment relating to the floating charge’s validity.
Video: February: Where BHS settlement leaves Sir Philip
The deal to release £30m from the reserves held in relation to Arcadia’s secured claim adds to Si Philip’s hefty bill for cleaning up the aftermath of what was Britain’s biggest high street failure in a decade.
The £35m sum was initially transferred by Duff & Phelps, the joint administrator to BHS, to Linklaters, Arcadia’s legal adviser, last October.
Following concerns raised by Jones Day, the law firm acting for FRP, however, the funds were returned to Duff & Phelps on 21 November.
Sir Philip’s lawyers had argued that Arcadia’s charge over the £35m was valid – a view shared by Duff & Phelps, which said in an update to BHS’s creditors that DLA, another law firm, had confirmed its legitimacy.
In that report, Duff & Phelps said: “We understand that the concurrent administrators are investigating additional matters which they say may impact on the validity.”
The contested funds were subsequently transferred back to FRP following the move into liquidation of the rump of BHS.
Sir Philip’s settlement with SHB avoids the prospect of another lengthy legal battle emerging from the wreckage of BHS.
Dominic Chappell, to whom Sir Philip sold the chain in 2015, was this week told he faced charges by The Pensions Regulator for allegedly failing to co-operate with its investigation into BHS’s collapse.
Sir Philip also averted the prospect of a protracted fight with the pensions watchdog earlier this year when he agreed to pay up to £363m into BHS’s retirement schemes.
That came after a political row lasting months in which Labour MP Frank Field led a bitter crusade against the tycoon.
Source: SKY News Feed