Wrongful Trading: Largest ever personal liability imposed upon directors since the Insolvency Act 1

Our market leading Expert Witness services and recent case wins

BDO’s Expert Witness team prepared and delivered expert testimony in the trial brought by the Liquidators of BHS Group Limited and subsidiaries (‘the Group’) against three of the Group’s former directors: Dominic Chappell, Dominic Chandler and Lennart Henningson.

Why were we instructed

BDO’s insolvency expert witness team has been involved in all of the leading insolvency disputes in the UK in the last 8 years. Our specialist team has broad and deep experience in presenting complex financial information to explain companies’ journey down the “financial distress curve” that is consistently referred to in judgments. Most of the cases on which we are instructed have settled in favour of the party which instructed us, shortly following meetings of independent experts. We act for both claimants and defendants.

Background

BHS was sold by Sir Phillip Green’s Arcadia Group (‘Arcadia’) to a company controlled by some of the defendant directors for nominal consideration, with a dowry from Arcadia of c. £39 million and substantial property assets. The Group, which ran around 250 homeware and clothing stores, was making losses of c. £70 million per year and had significant defined benefit pension liabilities. Following the sale, the defendants pursued a strategy of funding trading losses by borrowing against the Group’s property assets whilst implementing a turnaround plan. The plan failed and, as a result, administrators were appointed just over a year later, following which Liquidators from FRP were appointed.

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