Arcadia has agreed to pay tens of millions of pounds to unsecured creditors in BHS following the collapse of the department store chain.
The Sir Philip Green-owned group has struck the deal with BHS’s liquidators, FRP Advisory, according to Sky News.
SHB Realisations – the name used by BHS in liquidation – has consequently dropped a legal claim filed at the High Court earlier this month against Arcadia.
It is thought the claim partly related to a £35m floating charge held by Arcadia and dating back more than two years to April 2015.
FRP Advisory queried the charge last November, seven months after BHS tumbled into administration.
The agreement between SHB and Arcadia, which owned BHS before selling it for a nominal £1 to Retail Acquisitions in March 2015, does not include any judgement relating to the validity of the charge.
The £35m sum was initially transferred by BHS’ joint administrator Duff & Phelps to Linklaters, Arcadia’s legal advisor, in October last year.
But the cash was returned to Duff & Phelps a month later amid concerns from the law firm acting for FRP Advisory, Jones Day.
Green’s lawyers and Duff & Phelps had argued that Arcadia’s charge over the £35m was valid, but the group has now agreed to release £30m and avoid the prospect of another legal battle.
However, the deal adds to Green’s hefty bill in the aftermath of BHS’ collapse.
Earlier this year, the tycoon agreed to pay £363m to help plug the black hole in the failed department store chain’s pension scheme.
Dominic Chappell, who led the Retail Acquisitions consortium, will be prosecuted by the Pensions Regulator for allegedly failing to co-operate with its investigation into BHS’ demise.