BHS inquiry: Linklaters has billed Arcadia £1.2m in fees

Linklaters has billed Arcadia £1.2m so far for its advice on the sale of BHS, the retailer’s administration and other subsequent fallout, a letter to MPs has revealed.

In a letter dated 6 June, corporate partner Owen Clay wrote to the chair of the Work and Pensions Select Committee, Labour MP Frank Field, at Field’s request, to provide details of the fees received by Linklaters from Arcadia in relation to BHS.

The letter forms part of the inquiry by the Business, Innovation and Skills (BIS) Committee and the Work and Pensions Select Committee into the sale of BHS to Retail Acquisitions Limited (RAL) by retail tycoon Philip Green’s Arcadia for £1 last year, and the store’s subsequent collapse.

The magic circle firm advised Arcadia on the sale of BHS, which was completed in March 2015, and on the fallout from the sale including the post-completion financing of BHS and the retailer’s subsequent fall into administration.

In the letter, Linklaters said it continues to advise Arcadia on BHS-related matters and has so far billed it £1.2m for this advice.

Clay wrote: “Our fees charged to Arcadia in relation to the sale of BHS for the period from 12 February 2015 to 11 March 2015 (the date of completion of the sale) were £627,000.”

He said the firm had gone on to advise Arcadia on a raft of BHS-related issues including post-completion financing, the retailer’s administration and The Pensions Regulator’s investigation into the company.

Clay’s letter also specified that Linklaters was charging Arcadia on an hourly billing basis and that the firm is not charging “success fees or contingency fees” and does not have in place “any other form of incentive arrangements”. Linklaters later also revealed it has acted for Arcadia in relation to a number of corporate transactions since 2012.

In 2012, the firm charged Arcadia £900,000 for work carried out in relation to the sale of a 25% interest in the Topshop/Topman clothing company to Leonard Green Partners, a US private equity house.

In 2014, it charged Arcadia £480,000 in relation to an internal reorganisation of several Arcadia clothing brands, including Dorothy Perkins, Evans and Burton.

Field also requested details from Olswang on the fees it charged Dominic Chappell’s RAL, which bought BHS.

Field asked Olswang GC Stephen Hermer, who appeared at a committee hearing on 25 May, how much Olswang charged RAL in relation to its purchase of BHS and how much in total it has billed RAL on this and other matters.

In a letter dated 3 June, chief executive officer Paul Stevens did not provide details of the fees received by the firm, however a spokesperson for parliament said the firm said it could not provide details of its fees as Chappell had not waived privilege. 

Hermer’s letter did not specify the exact reason for not providing the information requested, but said: “While we wish to be as helpful as possible to the Committees, we are bound by professional obligations regarding legal professional privilege and client confidentiality, which have not been waived by our clients.”

Letters from Nabarro and Eversheds partners to Field also reveal details surrounding the work undertaken by those firms into the sale of BHS.

Nabarro partner Ian Greenstreet, who appeared before the committee on 23 May, had advised Arcadia’s owner Taveta on pensions matters between 2009 and 2015.

Greenstreet’s letter revealed that Nabarro charged Taveta Group companies £42,000 for its advice on the sale of BHS.

The letter also revealed that between 2009 and 2015, Nabarro billed Taveta Group companies a total of £933,000. Eversheds partner Emma King, who advised the trustees of the BHS pension scheme, was asked by Field when she had learned of RAL as a possible purchaser of BHS.

King wrote to Field on 2 June to state that she had learned of RAL (then known as Swiss Rock) on 3 February 2015.

Further on in the letter, King acknowledges there was a discrepancy in her initial answer to Field in the Select Committee meeting on 23 May. While giving evidence in that meeting, she said Eversheds became aware of the sale to RAL on 4 March.

BHS collapsed into administration on 25 April, putting 11,000 jobs at risk and leaving a £500m hole in its pension scheme. With the administrators unable to find a buyer, the company was put into liquidation last week.