A judge has ruled that the former owner of BHS, Retail Acquisitions, is insolvent and its main director Dominic Chappell could be pursued for millions, it has been reported.
The Guardian said Chappell could be personally liable for money owed by the company to Sir Philip Green’s Arcadia empire and other creditors.
Lance Ashworth QC, a barrister specialising in insolvency, said liquidators will now closely examine the investment vehicle’s accounts to check that all the payments and agreements made by the company were legitimate.
“If a payment has been made to somebody it shouldn’t have been paid out to in breach of the directors’ fiduciary duty, then the directors will be liable to make a contribution to the company’s assets,” Ashworth told the newspaper.
“They will also seek to establish if the company had been trading while insolvent. That could lead to a charge of wrongful trading. The liquidators will look at the company’s financial position at the outset and at the end of the day and could ask for a contribution for the difference between them.”
Chappell did not respond to a request for comment from The Guardian.