A celebrity lawyer who advised the bankrupt owner of BHS was "directly involved in misappropriating" £10 million of the company's assets, the High Court in London has been told.
Liquidators have accused Edward Parladorio of an "outright plundering" of the BHS Group through a company owned by him and Dominic Chappell in the 13 months before the once-renowned high street retailer collapsed in 2016. Parladorio, a well-known City solicitor who is understood in the past to have represented celebrities including Hugh Grant and Ulrika Jonsson, denied the allegations from the witness box this week.
The dispute before Mr Justice Henshaw revolves around the circumstances in the run-up to the demise of the chain, which first opened in Brixton in south London in 1928 and became a fixture of British high streets.
The BHS companies were originally owned by Sir Philip Green through the tycoon's wider retail empire, Arcadia. In 2015, Green's company sold BHS Group's share capital for £1 to Retail Acquisitions Limited (RAL), a business that the court was told was founded by Parladorio and in which Chappell ultimately held a 90 per cent stake.
Lawyers for the liquidators of BHS Group told the court that at the time RAL was created, Chappell had been declared bankrupt four times. They added that, as part of the sale deal, RAL also received a substantial "dowry" from Green "as an incentive to take the BHS Group off his hands."
The court heard that Parladorio was described as Chappell's "right-hand man" in terms of advisers and that "in practical terms," RAL was under the joint control of the two men. According to the claim, Parladorio was "at all material times" in control of RAL's bank accounts, with the lawyer said to have stated: "I am in charge of payments from RAL."
BHS Group's collapse into insolvency in 2016 triggered several investigations, eventually leading to Chappell being convicted four years later of tax fraud and sentenced to six years in prison. The collapse left 11,000 workers facing an uncertain future and a pension scheme with a massive deficit, becoming one of the defining corporate scandals of the decade.
The case against Parladorio represents the liquidators' attempt to recover funds they allege were stripped from the company in its final year. The proceedings are expected to examine in detail the flow of money through RAL's accounts and the role of the professional advisers around Chappell.
Parladorio's position as a solicitor to the stars adds a layer of notoriety to the case. His reported past clients, Hugh Grant and Ulrika Jonsson, are not involved in the proceedings, but his celebrity connections have ensured intense media interest in a trial that revisits one of the most controversial episodes in recent British business history.