Directors Duties After The BHS Decisions

Introduction

In March 2015, BHS was sold for to Retail Acquisition Limited for the princely sum of just £1. Dominic Chappell (a thrice bankrupt former racing driver with no experience in retail) and his fellow directors took the helm of the struggling group. A little over a year later, in April 2016, BHS collapsed into administration and later insolvent liquidation by which point the net deficiency was a staggering £1.3 billion).

Unsurprisingly, the Joint Liquidators brought actions against the directors for wrongful trading (pursuant to s.214 of the Insolvency Act 1986) and misfeasance under s.212 (including breach of the duty to consider the interests of creditors, the "Creditor Duty").