According to a recent report, hedge funds and administrators have come out on top in the aftermath of the collapse of UK department store chain Debenhams. The hedge funds that managed Debenhams have reportedly recovered most of their expenses, while the retailer’s administrators, FRP Advisory, have amassed £5.3 million in fees since being appointed in April 2020. This situation arose as Debenhams filed for insolvency for the second time due to the temporary closure of its stores during lockdowns. Documents reviewed by The Times reveal that the hedge funds involved in the administration process have received a total of £314 million. However, unsecured creditors, including local authorities and pension schemes, are unlikely to receive any repayment on their claims, which stood at approximately £200 million at the time of the administration. The hedge funds were able to recoup a significant portion of their investment by selling Magasin de Nord, Debenhams’ Danish subsidiary, for £120 million. The report further discloses that the charges imposed by FRP partners have risen from £495-£595 an hour to between £595 and £695. The rates for junior professionals and support staff have also increased from £150-£195 to between £175 and £245. FRP has chosen not to provide comment on this matter. In January of last year, FRP oversaw the sale of Debenhams’ brand and website to Boohoo Group for £55 million, resulting in the loss of 12,000 jobs and the closure of 124 stores. Presently, nearly 90% of the former Debenhams stores remain unoccupied.

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The Times
Boohoo Group