// Debenhams has been wound up by the Insolvency and Companies Court
// Judge Daniel Schaffer described Debenhams as a “rudderless ship” drifting in an “ocean of insolvency”
// It comes after Boohoo confirmed it had bought the Debenhams brand & website for £55m
Debenhams has been wound up by a judge in a specialist court, just hours after it was announced that Boohoo would acquire its brand and website in a £55 million deal.
Judge Daniel Schaffer made a winding-up order for the collapsed department store chain at an online hearing in the Insolvency and Companies Court today.
He described Debenhams as a “rudderless ship” drifting in an “ocean of insolvency” which needed to be brought into port.
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The judge said the Official Receiver now should assess the position.
He had been asked to consider Debenhams’ position by lawyers representing a shareholder and debtors.
The judge said he was making a winding-up order of his own motion.
“The company is a rudderless ship drifting in an ocean of insolvency, unable to be rescued,” he said.
“It is time for the court to bring this ship into port, so the harbour master, here the Official Receiver, can assess the position.”
Judge Schaffer made a winding-up order after Boohoo Group confirmed it had bought the Debenhams brand and website for £55 million.
The deal will see Debenhams’ website and ecommerce operations come under Boohoo ownership, and Debenhams’ own-label products would be sold by Boohoo.
The takeover comes into effect as early as the start of Boohoo’s next financial year which is in March.
The Boohoo deal does not include Debenhams’ remaining 118 shops, which means 12,000 staff are set to lose their jobs once the department store’s liquidation process concludes.
Debenhams had already announced significant job losses and the permanent closure of six stores earlier this month, including its flagship outlet on London’s Oxford Street.
Boohoo said the deal represents a “fantastic opportunity” to target new customers and launch into the beauty, sports and homewares market for the first time.
Debenhams went into administration in April last year, and fell into liquidation the following December after takeover talks with JD Sports fell through.
Lawyers representing businessman Mike Ashley’s Frasers Group had issued a winding-up petition.
A barrister representing Frasers Group had asked Judge Schaffer to consider a number of preliminary issues at today’s hearing.
However, Judge Schaffer described Debenhams as “plainly insolvent” and said he had decided to make a winding-up order of his “own motion”.
He said Debenhams was not trading and had no directors in office.
Frasers Group once owned nearly a third of Debenhams’ shares, but its stake in the department store was wiped out when it first fell into administration in 2019.
The consortium of banks and lenders, known as Celine, that subsequently acquired Debenhams soon launched a CVA which led to several store closures immediately after Christmas 2019 and before the Covid-19 pandemic gripped the UK.
Celine only had control of Debenhams for about a year before it fell into administration again in April.
with PA Wires