Retail entrepreneur Kevin Stanford has reportedly been forced to pay out £2.5m of his own money after personally guaranteeing a bank loan to his former premium womenswear business Ghost which fell into administration in 2008.
Stanford had a 50% stake in Ghost, which had 32 UK stores and fell into administration in October 2008, owing £5m to VB Investment Bank. It was rescued from administration by Touker Suleyman, owner of shirt retailer Hawes & Curtis.
Stanford, who once had a fortune of £220m lost control of several of these investments when the Icelandic bank system collapsed at the end of 2008.
This latest loss was caused when the Iceland supreme court found Stanford personally liable for half of the loan to VB Investment Bank, since he owned half of Ghost jointly with investment partner Arev, according to The Daily Telegraph.
The report said a panel of three judges ruled that according to contractual documents there was no collateral apart from Mr Stanford’s own word that he would back the loan.
In August 2009, Stanford’s business dealings came under scrutiny as it emerged that he was the fourth largest shareholder in nationalised Icelandic bank Kaupthing and his companies borrowed £450m from the bank.