Administrators tell Life & Style directors to return 'incorrectly used' monies

Adminstrator of Life & Style RSM Tenon has filed a confidential report on the directors’ conduct to The Insolvency Service, according to news website The BusinessDesk.com

It said: “In proceeding with our investigations into the trading of the company prior to our appointment, certain matters have arisen which suggests that the joint administrators may be able to take action against various parties for the repayment of monies which were incorrectly used. These investigations are ongoing and, if necessary we will commence court action in order to secure the repayment of company funds.”

One creditor told TheBusinessDesk.com that some of the company’s trade creditors appeared to have been paid in full prior to it being placed into administration, to the detriment of its remaining creditors.

Life & Style, which was born out of the administration of womenswear chain Ethel Austin, collapsed into administration in June after just over a year in existence.

The business was set up in March 2010 by Elaine McPherson, the former head of defunct value chain MK One, but was placed into administration on June 10.

It was sold to Ashloch Ltd, a company owned by former director of academic bookseller Blackwell, Sue Townsend. Townsend bought the business for £1.5m in August retaining 62 shops, predominately in the Northwest, and safeguarding 470 jobs. She reverted back to the retailer’s original name of Ethel Austin.

Meanwhile, it is understood that Ashloch, which agreed to pay the £1.5m in 15 monthly instalments, had yet to pay the administrator as of January 6.

RSM Tenon said: “We are in discussions with the directors with a view to bringing these arrears up to date.”

Of the 117 remaining Life & Style stores not taken by Ashloch, RSM Tenon have managed to re-let 12.