US group to sue Hinchliffe

Facia suitor seeks damages as SFO sifts vanloads of seized papers

Texas American Group is planning to sue Sheffield businessman Stephen Hinchliffe for losses and damages for alleged misrepresentation over an abortive attempt to take over his Facia retail empire just before it collapsed two months ago.

TAG, which is quoted on New York's Nasdaq stock exchange, says it incurred $750,000 (pounds 484,000) costs in assessing the deal. It also claims it had binding contracts, based on warranted profit figures from Facia, which allegedly turned out to be complete fiction.

"We are taking legal advice regarding our position," TAG chief executive Bill Grosvenor confirmed this weekend, declining to comment in detail. It is understood, however, that action is also being considered against others, including Mr Hinchliffe's advisers during the deal.

The move comes after the Serious Fraud Office launched an investigation last Thursday into the collapse of Facia in June, which has left creditors nursing debts of pounds 60m so far.

SFO officers, led by assistant director Gordon Dickinson, together with South Yorkshire police, raided five premises in Sheffield and London, seizing vanloads of documents at Facia's mansion headquarters and the homes of Mr Hinchliffe and his long-time associate, Christopher Harrison.

Mr Hinchliffe, sources say, was in bed in his Eaton Row residence in London's plush Belgravia and watched in pyjamas and socks as police executed the search warrants.

At his Sheffield home, officers apparently even confiscated his wife's address book. No arrest warrants were issued and the SFO this weekend is sifting through the boxes of documents.

Mr Hinchliffe and Mr Harrison are already facing disqualification by the Department of Trade and Industry over the failure of tennis court maker En-Tout-Cas in 1993, one of a series of crashes that have dogged their careers. Both did not return calls last week.

The SFO inquiry is not the flamboyant Sheffield entrepreneur's first brush with the police. In 1991, he was arrested and later released without charge by West Midland police over an allegedly improper property deal.

Facia, which included Sock Shop and the Salisbury's luggage chain, collapsed owing pounds 30m to banks and suppliers on the basis of initial estimates. It also owes another pounds 29.9m to retail giant Sears, which sold Mr Hinchliffe Saxone, Freeman Hardy Willis and Curtess shoes shops in a dizzy bout of deal-making by the Yorkshire businessman over the last two years.

At the time of the collapse, with 850 shops, Facia was the country's second largest private retailer after Littlewoods.

On Tuesday, at London's Glaziers Hall, receiver KPMG will present hundreds of creditors with a fuller picture of their losses.

So far, they have managed to sell most of the shops, including the Red or Dead, Contessa and Oakland chains. The proceeds will repay Facia's secured lenders, including Israel's United Mizrahi Bank, Midland and the Bank of Scotland, which are owed around pounds 8m. However, other creditors are unlikely to be repaid anywhere near in full.

KPMG has also been investigating allegations of trading while insolvent, a criminal offence, and the suspected disappearance of millions of pounds of payments made to Facia by sellers in return for taking over the loss- making shops.

In addition, the receiver has been seeking to recover at least pounds 2.5m of loans on favourable terms to Mr Hinchliffe's private companies. The businessman is understood to have charged huge expenses to Facia as well as some pounds 2m of "finder's fees" for identifying acquisitions. In all, claims against Mr Hinchliffe may total pounds 20m, sources say.

Facia's directors have yet to provide a statutory statement of affairs, as required by law with 21 days of the collapse.

This weekend Buchler Phillips, the accountant advising Mr Hinchliffe, said it was hoping to present the statement on Tuesday. "We have to meet the deadline. We don't intend to be late," partner Lee Manning said.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'