Fees for advisers on BHS administration approach £3m

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A new report from the administrators of BHS has revealed that professional advisers working on the fallout from the retailer’s collapse have racked up another million pounds in fees, in less than six weeks.

The latest report by joint administrators Duff & Phelps and FRP Advisory, which was circulated to creditors earlier this week and seen by Sky News, shows that professional advisers earned an additional £1.125m between 25 October and 2 December, bringing the total fees for advice on the collapse to almost £3m.

BHS went into administration in April, in one of the UK’s largest ever corporate failures. More than 11,000 jobs were lost and 20,000 pensions put at risk after it emerged that the company, which had more than 160 stores across the UK, had a pension deficit of £571m.

Retail magnate Sir Philip Green has been heavily criticised for his role in the collapse. Green and other shareholders had taken around £580m out of the business before selling it for just £1.

The saga has involved a number of leading UK and US law firms. Linklaters acted for Green’s Arcadia Group on the sale of the company to Retail Acquisitions, which was advised by Olswang.

Weil Gotshal & Manges and DLA then took the lead roles on the administration, acting for the company and administrators respectively, while Jones Day was appointed by the administrators to investigate the actions of the company’s former directors.

Partners at Eversheds, Linklaters, Olswang and Nabarro were among those questioned by a government committee investigating the company’s sale and pension deficit. Nabarro had provided pensions advice to Arcadia owner Taveta, while Eversheds advised the trustees of the BHS pension plan.

Linklaters and Olswang were criticised by the government for having only carried out “cursory” checks into Retail Acquisitions, whose owner, Dominic Chappell, had previously been declared bankrupt three times. It was revealed after BHS’s demise that Chappell had used a £1.5m BHS loan to repay the mortgage on his family home.

London media and privacy boutique Schillings subsequently got involved after it was instructed by Green to demand an apology from Frank Field MP – who co-led the Parliamentary inquiry into the collapse – after he claimed Green had “plundered” the BHS pension scheme.

The administrators have told BHS’s 7,500 unsecured creditors, who have claims totaling $1.3bn, that they can expect returns of just 2%-8%.