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Winding-Up Petition issued by BHS against their shareholder

June 09 2017

BHS have reportedly made an application to issue a winding-up petition against Retail Acquisitions Ltd (RAL) due to a failure to pay an intercompany debt. 

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Retail Acquisitions Ltd face winding up petition by BHS

Winding-Up Petition

BHS have issued a winding-up petition against Retail Acquisitions Ltd (RAL) after being owed £6,177,000 . It was agreed that the loan would be repayable  in instalments or sanctions would be issued. The Sanction was that if RAL failed to pay any instalments  the whole sum, plus default interest, would become payable. Retail Acquisitions Ltd reportedly failed to pay a instalment of £100,000 on 21 July 2016. BHS have since issued a winding-up petition.

BHS is reportedly seeking to recover the money owed to them by RAL by way of set off clause. As a result of the set off cause being in the agreement  BHS are entitled to recover the deposits paid on the loan if  RAL miss a payment. RAL claimed that the set off clause was not binding however the Judge disagreed and said it was.

RAL claimed even if the clause was not binding they did still have a genuine claim against BHS for an amount that exceeded the amount they owed. The Judge acknowledged that this was a ground for striking out and dismissing a winding-up petition, however in the case RAL have against BHS, RAL had invoices to show what amount was owed to them. The invoices which RAL relied on had been issued to another company within the BHS group.

The Judge then had to decide on the issue whether RAL was insolvent. To do this, the Judge used the ‘balance sheet test’ which included looking at RAL’s total liabilities. This included the sum owed to Arcadia Group. The Judge ruled that RAL had no present income stream, and in addition; RAL were unable to provide sufficient evidence to substantiate  the value of assets it claimed to have.

 Winding-up Petition Solicitors

If you have received a winding up petition our legal experts are able to provide legal advice and representation. Our team of solicitors and barristers can obtain a court adjournment; CVA’s or successfully challenge the validity of the winding  up Petition to ensure that the petition is dismissed, often without public advertisement.

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The articles published on this website, current at the date of posting, are for reference purposes only and do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.

Call us on ☎ 02071830529 or email us on for more information about the specialist insolvency legal services we provide. Our team of London lawyers are based in Middle Temple adjacent to the Companies Court. We are committed to providing professional and specialist legal advice and are leading experts in cases involving winding-up petitions.