Directors of companies registered in England and Wales have been served a stark reminder that they need to take their duties seriously when trading in the “zone of insolvency”.

1. Introduction

Directors of companies registered in England and Wales have been served a stark reminder that they need to take their duties seriously when trading in the “zone of insolvency”. On 11 June 2024, the High Court in England handed down both the longest (at 533 pages) and the largest (possibly up to £133.5 million) judgment against certain directors of what was one of the most prominent department store chains in England.

2. Background

British Home Stores (BHS) was a retail company that was once the cornerstone of the British high street. It sold homeware, clothing and furniture and, at its height, had over 11,000 employees. Whilst enjoying profitability for a number of years, things took a turn for the worse, and from 2009 BHS began to incur financial losses.

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