A row has broken out between creditors and administrators at the collapsed fashion group Ted Baker amid claims of a conflict of interest.
Secure Trust Bank, one of Ted Baker’s main lenders, attempted to eject the restructuring firm Teneo Financial Advisory from its role as administrator because it is owned by the private equity firm CVC, which also holds a stake in Ted Baker’s owner, Authentic Brands.
According to several people familiar with the situation, Secure Trust was concerned that Teneo might have an incentive to act in the interests of its owner, rather than creditors.
Teneo was appointed in March by Ted Baker’s independent director, and Secure Trust tried to replace it with another restructuring firm, FRP Advisory. The dispute ended up in court, where a judge ruled that Teneo should remain in place.
A source close to CVC denied any conflict of interest, saying that all its portfolio companies were run by independent teams.
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The row highlights the possible challenges faced by private equity firms owning professional services companies. With portfolios of dozens of businesses, some in the sector fear that such firms may also have conflicting incentives.
Documents filed by the administrators yesterday showed that Ted Baker has 612 unsecured creditors and nearly £60 million in claims that are unlikely to be repaid. It also shows that Secure Trust is owed £15.6 million by Ted Baker, which it expects to be paid.
Teneo was founded by Declan Kelly and Douglas Band in 2011. In 2019, CVC bought a majority stake in the firm, which has expanded and now provides a host of other professional services.
In 2021, it bought Deloitte’s restructuring arm, and in 2022 it oversaw the administration of the energy firm Bulb. It is currently the administrator in waiting for Thames Water if the indebted utility ends up going bust.
Ted Baker was founded in 1988 in Glasgow by Ray Kelvin, who stepped stepped down from the company in 2019 over allegations of “forced hugging”. He strongly denied the allegations.
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So far, the administration has led to 15 Ted Baker stores closing and the loss of 245 jobs.
All of the firms declined to comment.
