Yahoo News Arcadia lawyers hand back £35m after BHS liquidator protests
Lawyers for Sir Philip Green's high street empire have returned a disputed £35m sum from the wreckage of BHS following a protest lodged by solicitors for one of the administrators to the collapsed retailer formerly owned by the billionaire tycoon.
Sky News has learnt that a floating charge put in place at BHS by Sir Philip's Arcadia Group was transferred by Duff & Phelps, the joint administrator, to Linklaters on October 27.
The money was held in an escrow account by Linklaters and could not have been released to Arcadia without Duff & Phelps' authorisation, according to sources who insisted that the £35m was never transferred to any of Sir Philip's companies.
Following concerns raised by Jones Day, the law firm acting for fellow administrator FRP Advisory, however, the funds were returned to Duff & Phelps on November 21.
An indication of the dispute over the floating charge was contained in a progress report produced by Duff & Phelps and FRP, reported by Sky News last month.
Sir Philip's lawyers have argued that Arcadia's charge over the £35m is valid - a view shared by Duff & Phelps, which said in its recent update to BHS's creditors that DLA, a law firm, had confirmed its legitimacy.
In the report, Duff & Phelps added:
"We understand that the concurrent administrators are investigating additional matters which they say may impact on the validity."
FRP and Jones Day are understood to have raised questions about whether Sir Philip's company is a so-called connected party, and therefore whether it may have to forfeit its sole right to the £35m charge.
The contested funds will now be transferred to FRP following the move into liquidation of the rump of BHS - now known as SHB Realisations Limited.
Sources said there was a general expectation that Sir Philip's charge over the £35m will be found to be legitimate.
FRP was drafted in to act as joint administrator, and now liquidator, of the high street chain, at the behest of BHS's largest creditor, the Pension Protection Fund (PPF (Shenzhen: 300258.SZ - news) ), the lifeboat now responsible for retirement payments to thousands of former BHS employees.
Duff & Phelps had argued against the move into liquidation, saying that it risked reducing the overall returns to creditors.
Its report said that unsecured creditors can expect to receive a maximum of just 8p in the pound following the biggest British high street collapse since Woolworths nearly a decade ago.
In addition, it said its investigations into Retail Acquisitions Limited, the vehicle of Dominic Chappell, who bought BHS from Sir Philip for £1 last year, were far enough advanced that replacing it with a different firm acting as liquidator "makes no sense".
BHS fell into administration in April, triggering roughly 11,000 job losses and a bitter political battle aimed at securing a pension bailout likely to cost Sir Philip well over £300m.
A subsequent non-binding vote in the House of Commons suggested that he should be stripped of his knighthood, while The Pensions Regulator recently initiated legal action against Sir Philip, Arcadia's parent Taveta and Mr Chappell.
The tycoon, who owns Topshop and other leading high street names, has responded furiously to criticism led by the Labour MP Frank Field, who last month asked the boss of the regulator whether it had the power to acquire "assets other than cash from a person or company from which payment is being sought".
Discussions are said to be ongoing between Sir Philip and the watchdog about a voluntary settlement.
Mr Field chose to continue his attack on Sir Philip on Friday, saying: "We should no longer be surprised when this saga sinks to new depths, but this is astonishing.
"Sir Philip has continued working behind the scenes: not to secure the biggest possible amount for the BHS pensioners from the company they worked for, but to snaffle it for himself.
"His dissembling that this is somehow for the benefit of the pensioners just comes across as deceitful.
"The importance of the PPF ensuring that an independent administrator took charge becomes even more clear."
The PPF, Arcadia, FRP and Duff & Phelps all declined to comment on the movement of the £35m sum.
