Dominic Chappell‘s company Retail Acquisitions Limited (RAL) has been put into liquidation, opening the door for creditors including Sir Philip Greens Arcadia Group to recoup “plundered” BHS funds.
RAL was placed into liquidation last Thursday following a high court ruling, allowing liquidators to scour the company‘s financial records to establish the legitimacy of the millions of pounds taken from BHS funds during RAL‘s 13-ownership.
On Tuesday, a judge ruled that the company was insolvent, despite Chappell‘s claims that RAL still held £10 million in assets so was still a viable business.
The newly available financial records revealed that shortly after incorporating BHS, RAL took out a £6.2 million loan and soon after removed a further £2.8 million which was given to RAL directors.
The £6.2 million loan from the deceased retailer was being paid back in £100,000 installments, which Chappell subsequently stopped paying. BHS administrators Duff & Phelps requested the court ruling to place RAL into liquidation to recoup the missing assets.
Fees recouped form the assets of RAL will go towards the BHS pension deficit, which effects around 22,000 ex-staff member‘s pensions.
RAL also took out a separate £3.5 million loan from Green‘s Arcadia group.
“If a payment has been made to somebody it shouldn‘t have been paid out to in breach of the directors‘ fiduciary duty, then the directors will be liable to make a contribution to the company‘s assets,” insolvency specialist and barrister Lance Ashworth QC said.
“They will also seek to establish if the company had been trading while insolvent. That could lead to a charge of wrongful trading.
“The liquidators will look at the company‘s financial position at the outset and at the end of the day and could ask for a contribution for the difference between them.”