Arcadia releases £30m to be paid to BHS unsecured creditors

Sir Philip Green's Arcadia group has struck a deal with the liquidators of the collapsed BHS chain in which it has released £30m of funds to be paid to unsecured creditors, according to reports.

Sky News has reported that the deal is in part related to related to a disputed £35m "floating charge" held by Arcadia dated 14 April 2015. FRP Advisory, the joint administrator and subsequently the liquidator of BHS, queried that charge last November.

SHB Realisations, the name used by BHS in liquidation, has now dropped a claim filed at the high court this month against Arcadia. However the subsequent deal for Arcadia to release the £30m makes no judgement in relation to the £35m floating charge's validity.

The £35m sum was initially transferred by Duff & Phelps, the joint administrator to BHS, to Arcadia's legal adviser Linklaters last October. Duff & Phelps had said that Arcadia's secured claim was valid as had Sir Philip's lawyers and this had been backed up by another law firm DLA.

The deal to release the funds removes the possibility of a legal battle but it adds to the already hefty sum Sir Philip has paid to clean up the mess of the aftermath of the chain's collapse last April, one year after he sold it for £1 to former bankrupt Dominic Chappell.

BHS' collapse led to the loss of 11,000 jobs and left a £571m hole in its pension fun. Sir Philip agreed to pay £363m to help plug the hole in February of this year. Chappell was told this week that he faces prosecution by the The Pensions Regulator for his failure to co-operate with he regulator during its investigation into the retailer's collapse.