Is There More To The BHS Administration?

It is been reported today that more than £25 million has been paid out from BHS to its owner, Retail Acquisitions, in the 13 months between the Department store’s sale and its collapse into Administration.

As it was reported in the news yesterday almost 11,000 jobs are at risk in BHS after the administrators were called in on Monday, which is now being regarded as the U.K.’s biggest High Street failure since the collapse of Woolworths in 2008.

Consequently, following the report of the payment to Retail Acquisitions that company will now face serious questions over its role in BHS’s downfall.

Duff and Phelps have been appointed as administrators of BHS and will keep the stores open as it tries to find a buyer.  The government have insisted that they will support and stand ready to offer assistance if a buyer cannot be found. Furthermore, a string of MPs are now calling for the government to investigate whether there has been any impropriety in the downfall of BHS.

It is being reported that there is around 30 interested parties in buying BHS. At least two of these have been reported as serious candidates.

When a company is placed into administration the actions of the directors and ultimate owners of the business are called into question.  Directors should always ensure that they are fully aware of their duties in order to ensure that they do not fall foul of any legislation and that any transactions which they are involved in could not be unravelled by an administrator should the company find itself in financial difficulty.

Forbes Solicitors are specialists in insolvency and all areas of business law. Please do not hesitate to contact Pauline Rigby should you require any further advice in any of these subject areas on Freephone 0800 689 0831 or send any question through to Forbes Solicitors via our online contact form.

Pauline Rigby

About Pauline Rigby

Pauline Rigby is Head of the Corporate and Restructuring team at Forbes Solicitors. Pauline’s blogs cover a wide range of corporate issues, specifically areas including company formation, banking, joint ventures and shareholder matters, contractual matters and equity fundraising or investing.
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