Sir Philip Green‘s Arcadia Group has struck a deal to pay tens of millions of pounds to unsecured creditors in BHS.
According to Sky News, Arcadia made the deal with restructuring firm FRP Advisory, liquidators of the collapsed department store retailer.
As a result, SHB Realisations – the name of the holding company for BHS that is under FRP Advisory’s control – has dropped a legal challenge against Arcadia filed at the High Court earlier this month.
It is believed the claim partly related to a £35 million floating charge held by Arcadia that dated back to April 2015.
FRP Advisory looked into the charge in November last year, seven months after BHS collapsed.
BHS was initially placed under the control of administrator Duff & Phelps when it collapsed in April 2016, before FRP was appointed as joint administrator in July.
In December, FRP was appointed liquidator of BHS, which meant it was handling the sale of the demised retailer‘s assets to pay creditors.
The recent agreement between SHB and Arcadia does not include any judgement relating to the validity of the charge.
The £35 million sum was initially transferred by Duff & Phelps to Linklaters, Arcadia‘s legal advisor, in October last year, but it was returned to Duff & Phelps a month later after concerns were raised from Jones Day, FRP’s law firm.
Although Green‘s lawyers and Duff & Phelps said Arcadia‘s charge over the £35 million sum was valid, the company has now agreed to fork out £30 million and avoid another legal battle.
Green‘s Arcadia Group had owned BHS for 15 years before it was offloaded to former bankrupt Dominic Chappell in March 2015 for the now-infamous sum of £1.
The collapse of the high street chain 13 months after Arcadia sold it left 11,000 people out of work, and Green, Chappell and various City heavyweights were subsequently dragged before MPs during a parliamentary inquiry after a £571 million pension black hole was discovered.
Earlier this year, Green agreed to pay £363 million to help plug the black hole in the pension scheme, which forced Taveta Investments, the parent company of Arcadia, to make £130 million of writedowns.
Meanwhile, Chappell is being prosecuted by The Pensions Regulator for failing to provide information for an investigation into the sale of BHS.
The regulator is prosecuting Chappell for failing to comply with three notices issued under Section 72 of the Pensions Act 2004.