pounds 10m judgment against Facia boss overturned
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Your support makes all the difference.Stephen Hinchliffe, former chairman of the collapsed Facia retail group, won a victory in court yesterday when a summary judgment for pounds 10m was overturned.
The judge, Vice Chancellor Sir Richard Scott, said the best interests of Facia's creditors would have been best served if the group had been allowed to continue trading rather than being forced into receivership: "The cessation of trading followed by the disposal of the assets of the companies on a forced sale basis would, it was always realised, lead to heavy losses for the creditors."
Facia went into receivership last summer following an application for administration against Facia's footwear business by Sears, which had sold several of its shoe chains to Mr Hinchliffe.
Yesterday's claim for a summary judgment had been brought against Mr Hinchliffe and the former Facia finance director, Christopher Harrison, by Price Waterhouse, the administrators for Facia Footwear. Price Waterhouse claimed payments of pounds 10m should never have been paid by Facia Footwear to other parts of the group as there was "no realistic expectation ... that the payments would ever be repaid".
Price Waterhouse's counsel alleged that pounds 9m paid by Facia Footwear to Salisbury's, Red or Dead and Oakland in April and May 1996 should never have been made because these companies were "hopelessly insolvent at the time".
Sir Richard countered: "It is not the least obvious that in continuing to trade in April and May, the directors were ignoring the interests of creditors."
He concluded that the attempt to persevere with a summary judgment was "unjustified and oppressive".
He awarded costs of pounds 60,000 to Mr Hinchliffe and Mr Harrison with a possible further payment of pounds 200,000.
Mr Hinchliffe is still the subject of a DTI action to disqualify him from being a director.
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