Two former BHS directors have been fined more than £12m following a High Court ruling that the executives had breached their fiduciary duties ahead of the retailer’s collapse in April 2016.
A High Court judge ordered Lennart Hennington and Dominic Chandler to pay £6.5m each after it found they were liable for wrongful trading and misfeasance between March 2015 to April 2016, City AM reported.
The pair have also been ordered to pay a further £5m for breaching their corporate duties.
The case was brought forward by liquidators Anthony Wright and Geoffrey Rowley of FRP Advisory, who accused the directors of wrongful trading, misfeasance, and breach of statutory and fiduciary duties in the year running up to the retailer’s administration.
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Justice Leech ordered Hennington and Chandler to contribute £6.5m each to company’s assets, and indicated that he would hand down an even more significant award to recognise the breaches of their fiduciary duties to BHS stakeholders by continuing to trade rather than putting the retailer into an insolvency process.
Former BHS owner Dominic Chappell, who returned to jail in March over breaching licence conditions, also had the same claims brought against him but was unable to attend the trial due to ill health. The claims against him have yet to be fully determined and will be considered further later this month.
As part of his ruling, Justice Leech has ordered a hearing to consider consequential matters, which will include the appropriate measure of loss, interest, costs, and any other relief to be paid by the directors.
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