BHS creditors wiped and 1,000 jobs to go as Sir Philip Green gets £35m
The demise of BHS means that the taxpayer will have to foot the bill for the redundancy payments
Additionally, the demise of BHS means that the taxpayer will have to foot the bill for the redundancy payments of thousands of its staff.
The department store chain employed 11,000 and is the biggest high-street casualty since Woolworths in late 2008.
Former owner Green is owed £35 million by BHS, while Barclays, Gordon Brothers and Grovepoint Capital are together owed £60million by the firm.
As secured creditors, the four have first claim to any monies recovered by administrators Duff & Phelps.
The 3,460-plus unsecured creditors of BHS are collectively owed £100million and insolvency sources warn that hardly anything will be left for them, once the secured creditors have been paid.
One leading insolvency practitioner said: “Green, Barclays, Gordon Brothers and Grovepoint will get the first chunk of any recoveries and by the time you have paid the administrators, property agents and so on, the unsecured creditors will have been wiped out.”
On Thursday Duff & Phelps announced it would start winding down BHS after failing to find a suitor with what it believed to be a viable, fully-funded plan to save the business.
Although it had wanted to keep BHS intact, none of its would-be saviours were keen to do so.
To raise money for creditors, Duff & Phelps will sell off all of BHS’s property and assets, including its brand.
The department store chain employed 11,000 and is the biggest high-street casualty since Woolworths
BHS was acquired by Green in 2000
The likes of Next, Primark and Sports Direct have been touted as possible buyers for parts of the estate.
Green said he was “saddened and disappointed” by the failure of BHS, while the man he sold it to for £1 in 2015, Dominic Chappell, reportedly said that he was “deeply sorry”.
On Wednesday, Chappell will appear at Parliament to face a joint Business and Work and Pensions Select Committee investigation into the collapse of BHS.
It is understood that the committee members will question Chappell’s fitness as a company owner and director.
They will also ask him to explain why he loaded high interest loans on to BHS and why it had lent £1.5million to a firm linked to his father, cash that was used to pay off his mortgage.
Sir Philip Green could recoup up to £35million from the collapse of BHS
On Thursday Duff & Phelps announced it would start winding down BHS
BHS was acquired by Green in 2000.
The retail mogul has been heavily criticised for taking out £400million in dividend payments from it while he was owner, as the final salary pension scheme has a £571million deficit.
Additionally, it is understood that the financial assessors working for the Parliamentary investigation will criticise Lord Grabiner’s performance as chairman of Arcadia, Green’s retail fashion empire and former parent company of BHS.
They are expected to say he was “less than effective” as chairman, a post he held from 2002 to 2015.
In correspondence to the investigation, Grabiner admitted he was not even at the meeting where the sale of BHS by Arcadia to Chappell was discussed.