Two former directors of BHS have been ordered to pay at least £18m to creditors after being found liable for wrongful trading.

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BHS fell into administration in 2016

A court found the two ex-directors, Lennart Henningson and Dominic Chandler, liable for wrongful trading, misfeasance trading and misfeasance over their management of the now-bust department store chain.

Both have been ordered to pay £6.5m each for wrongful trading and £5.6m between them for the charges of misfeasance.

FRP Advisory, the firm acting as liquidator to BHS, brought this case against the directors on behalf of creditors, which include the employees’ pension fund and former suppliers.

FRP added that the £13m wrongful trading award it acquired from Henningson and Chandler was the “largest” since the Insolvency Act 1986 was introduced.

Wrongful trading includes company directors continuing to trade despite knowing the business could not avoid insolvency.

A hearing involving another director, Dominic Chappell, is expected later this month. 

Chappell is the leader of Retail Acquisitions, which purchased BHS in 2015.

He previously spent millions of pounds from BHS on a yacht and other luxuries and was jailed for six years in 2020 over “brazen non-payment of tax”.

Henningson, Chandler and Chappell may also have to pay up to £133.5m combined for misfeasance, which would be given to creditors.

A final decision will be made later this month by Mr Justice Leech on the overall amount the former directors will have to pay.

The former department store chain fell into administration in 2016, with £1bn worth of trading liabilities and pension debts, while 11,000 jobs were lost.

The administration occurred after former owner and retail tycoon Philip Green sold the embattled business to Chappell for £1 in March 2015.

A £571m shortfall in pensions came about as a result of the collapse. Green later agreed a £363m cash settlement with The Pensions Regulator to fix part of the failed pension scheme.