BHS liquidators pursue claims against adviser over alleged pre-collapse asset stripping

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BHS liquidators asset claim

Highlights

BHS liquidators accuse adviser Edward Parladorio of breach of fiduciary duty and 'outright plundering' via millions in disputed payments before collapse.
Liquidators cite £7 million from BHS headquarters sale, £2 million credit facility, £600,000 VAT from an Oxford Street deal, and £749,000 in financing fees as improperly extracted.
Former owner Dominic Chappell and other directors have already been ordered to pay tens of millions by the High Court, with D&O insurance resources reportedly exhausted.

Court claims focus on management role and disputed payments

As reported by Financial Times, liquidators for the failed retailer allege Parladorio was involved in the "outright plundering" of BHS in the period leading up to its collapse. They are suing him for breach of fiduciary duty, arguing he was effectively a director despite not being formally registered as one.

Joseph Curl KC, acting for the liquidators, told the court that Parladorio was not only a director of Retail Acquisitions Limited, the vehicle used to buy BHS, but also a central figure in the retailer's management. He said Parladorio worked full time at BHS headquarters, attended 39 board meetings and received £32,000 plus VAT a month through service companies, more than the chief executive.

The liquidators allege millions were improperly extracted from the business through loans, fees and property transactions. They pointed to £7 million linked to the sale of BHS headquarters, £2 million from a credit facility, £600,000 in VAT from an Oxford Street property deal and £749,000 in financing fees.

Parladorio denies the claims. Michael Gibbon KC, representing him, says the lawyer was a dedicated adviser rather than a decision-maker and argues that carrying out requested tasks did not make him a director or place him under equivalent fiduciary duties.

Collapse legacy and wider corporate fallout

BHS entered administration a year after a group led by serial bankrupt Dominic Chappell bought the chain from Sir Philip Green for £1 in 2015. The failure led to store closures across the UK and the loss of 11,000 jobs, making it one of Britain's most prominent corporate collapses.

Green later agreed in 2017 to contribute £363 million toward BHS's £571 million pension deficit after pressure from politicians and the media. In 2024, the High Court ordered former directors including Chappell to pay tens of millions of pounds to cover losses incurred before the retailer's demise.

Chappell was sentenced in 2020 to six years in prison for tax evasion connected to his purchase of BHS. In the current case, former BHS general counsel Dominic Chandler testified that while Parladorio may initially have hoped to influence Chappell, it quickly became clear that he could not, though the liquidators have urged the court to treat Chandler's evidence with great caution because of his long relationship with Parladorio.

Gibbon also argues that bringing the claim so long after the collapse has had a devastating effect on his client and says directors' and officers' insurance has already been exhausted by earlier litigation. The case continues.

Our earlier article covered the collapse of Queensland caravan maker Australian Off Road after 26 years, leaving nearly 50 customers exposed after paying for vans that were never built. Administrators alleged the company may have traded while insolvent for years and flagged potential director offences, while creditors faced a $14 million claims bill and an uncertain recovery via a sale process or buyout proposal.

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