Clifford Chance

BHS: Directors held personally liable for wrongful trading and breach of duty

18 June 2024

Much ink has already been spilled over the recent English case initiated against the former directors of four companies in the British Home Stores Group (BHS). The group collapsed into insolvency over 8 years ago, leaving creditors seriously out of pocket to the tune of £1.3bn and with the pension funds alone having a £571m shortfall at the time of the collapse.

The collapse of BHS also prompted criminal sanctions against one of the directors, a disqualification order, and select committee enquiries, which resulted in changes to the pensions legislation to deter poor behaviour. In this latest case, other directors were held to be personally liable for over £42m (this included a notional liability in respect of two directors who had already reached a settlement and did not participate in the trial), with further damages to be assessed at a later date for misfeasance, which could be as much as £133.5m. In this short note we set out the key issues and practical lessons from the case, starting with our initial reactions to the Court's decision.

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