BHS demise triggered £1bn in creditor claims

Unsecured creditors of BHS, the retailer once owned by Sir Philip Green‎, lodged claims worth almost £1bn in the aftermath of its collapse, according to a report compiled by the chain’s liquidators.

Sky News has obtained a document sent to creditors late last week which discloses that a 3.6pm interim dividend – worth a total of roughly £36m – has been paid out by FRP Advisory, which is overseeing the winding-down of what was once one of Britain’s best-known high street brands.

BHS collapsed into administration in April 2016, little more than a year after being offloaded for £1 by Sir Philip Green, the high street billionaire.
Sir Philip endured months of public and political criticism before agreeing to pay up to £363m into BHS’s pension scheme, while as many as 11,000 workers lost their jobs when the chain went under.
Most of the interim dividend revealed in the FRP report has been funded by an agreement reached last summer in which Sir Philip’s Arcadia Group agreed to release its claim over a £35m floating charge linked to BHS.
The ‎progress report discloses that investigations into the circumstances surrounding BHS’s failure are continuing, but provides few further details because of their “sensitive and largely privileged nature”.
It does add that work to examine the disposal of properties “that appear to have advantaged certain parties potentially at the expense of the company”‎ is underway but is at an early stage.
FRP also said that it would probe the “appropriateness of fees paid by the company in respect of advice received from professional advisers” – thought to include law firm‎s which have already faced heavy criticism from MPs investigating BHS’s collapse.
Other inquiries into the department store chain‎’s demise, led by the Insolvency Service and the Financial Reporting Council, remain ongoing.

Dominic Chappell, the former bankrupt to whom Sir Philip sold BHS in 2015, is due to be sentenced next month following his recent conviction for failing to provide information to The Pensions Regulator.
The 3.63pm interim dividend compares to an original estimate by BHS’s administrators of a total recovery of up to 8p in the pound, suggesting that the eventual sum recouped from the chain’s wreckage could exceed that projection.
However, that figure will still be modest ‎in the context of the £998m of claims received from unsecured creditors – the largest chunk of which relates to BHS’s pension scheme.
The itemisation of the liquidators’ work details a number of unresolved disputes with UK-based store landlords and international franchisees.
The report by FRP, which also reveals a near £600,000 refund from previously overpaid business rates, comes just over a year after SHB Realisations entered into liquidation.
Sources said that a number of other BHS-related entities, including Davenbush – which was used under Sir Philip’s ownership to guarantee the retailer’s pension deficit and reduce its levy obligation to the Pension Protection Fund – were now in the process of moving from administration to liquidation.