UK taxpayer could foot the bill for Arcadia pensions, redundancy payments
The collapse of Philip Green’s retail empire could leave the UK with a bill adding up to hundreds of millions of pounds, according to reports.
The firm’s pension fund has a roughly £300 million deficit. But even though the money generated by selling the brands will fill part of that hole, the Pension Protection Fund could be left needing to find £200 million, The Times said, citing an independent pensions consultant.
The Green family had agreed a deal in 2019 to pay £385 million overall to support the pension fund, with £100 million coming from Lady Green who was the ultimate owner of the business. The last part of her payment was reportedly forthcoming in December, but it’s unclear what will happen regarding the rest of the money promised.
Meanwhile, the Telegraph reported that the taxpayer could also have to come up with almost £48 million to cover redundancy and statutory notice payments as the company is broken up, all of its stores are closed and around 13,000 people lose their jobs.
And as well as the money the taxpayer may be responsible for, reports also said that creditors are likely to see very little from the proceeds of the brand sales.
The company is believed to have had debts of at least £750 million when it collapsed and the Green family will be the first to receive any money back. The family made a £50 million interest-free loan to the company in 2019 and will see that repaid before suppliers, landlords and HMRC get any money. And the 1,000+ unsecured creditors are likely to receive just a tiny fraction of the money they’re owed.
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