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Two former directors of department store chain BHS have been ordered to pay at least £13m to creditors over their involvement in the collapse of the retailer in 2016.
High Court judge Justice Leech has fined Lennart Hennington and Dominic Chandler £6.5m each after finding them liable for wrongful trading and misfeasance.
The men could also face additional fines of up to £133.5m for misfeasance trading.
BHS fell into administration in 2016 with 11,000 job losses and £571m in pensions shortfall after the business was sold to Dominic Chappell a year prior.
In November 2020 Chappell was sentenced to a six-year custodial sentence for tax evasion, using the money to buy two yachts, a Bentley and a holiday in the Bahamas instead. Chappell’s claims regarding his involvement in BHS will be considered at a separate hearing later in June.
The case was brought forward by FRP advisory, the firm acting as liquidators to BHS, who accused the directors of “misfeasance trading” in the year running up to BHS administration.
The 533-page ruling indicates that an even larger award will be granted to recognise how the directors breached their fiduciary duties by continuing to trade rather than putting the company into an insolvency process, thereby failing to promote the success of the company in not considering the interests of their creditors.
Regarding the case, judge Leech said: “The various proceedings initiated by the liquidators since their appointment in 2016, which have most recently culminated in the judgement this morning, have sought to redress that balance and their work on many fronts has led to very substantial recoveries for the estate including, in particular, the Pension Protection Fund.”
