Mike Ashley’s Sports Direct considers legal action against Debenhams after lenders take control
Sports Direct is considering legal action against Debenhams after the retailer collapsed into administration, wiping out shareholders.
Retail tycoon Mike Ashley branded the pre-pack administration a “national scandal” yesterday after he failed to gain control of the department store chain.
Read more: Ashley lashes out as Debenhams enters administration
Sports Direct’s deputy chief financial officer Chris Wootton told the BBC this morning that the company was considering suing Debenhams, adding it was more than an idle threat.
He said the board “have absolutely not carried out their fiduciary duties” to shareholders.
He said: “It is a disgrace that we – as the biggest shareholder – have been treated in this way.”
Debenhams rejected two last-ditch rescue proposals from Ashley earlier this week and yesterday handed control over to lenders, who are now looking to sell off the business to bidders.
Shareholders, including Ashley who owned a near 30 per cent stake, have seen the value of their holdings wiped out.
In a ferocious attack the billionaire called for the advisers to “go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.”
Wootton also reiterated Ashley’s calls for regulators and politicians to reverse the administration process.
He said: “Even though we believe we gave very achievable, very good, solvent solutions for the business, they’ve just not been interested.
Read more: Mike Ashley could use a lesson in subtlety after Debenhams
“And now they’ve completely wiped out shareholders, they are planning to shut a lot of stores and thousands of people are going to lose their jobs.
“It didn’t need to be that way.”