Online retailer landed with £49.5m bill following settlement of insurer’s legal claim
Manchester-based inclusive fashion and homeware digital retailer, N Brown Group, will have to pay £49.5m in settlement of a legal case with insurance giant Allianz Insurance, it revealed today.
However, the full and final settlement is less than the claims origin ally issued by the insurer of more than £70m, including interest and costs.
The group said it has sufficient liquidity to meet the costs of the payout.
The settlement relates to a claim issued against JD Williams & Company Limited, a subsidiary of the company, by the insurer in January 2020, and JDW’s counterclaims in that litigation.
The dispute related to significant amounts of redress paid to customers by JDW and the insurer in respect of certain historic insurance products, including payment protection insurance.
Under the settlement, which is a negotiated settlement and made without admission of liability, JDW will pay the insurer £49.5m.
A provision of £25.5m, in respect of the claims by the insurer, was recognised in the company’s balance sheet as at 27 August 2022.
By the settlement, the dispute has been brought to an end, said N Brown.
It said the settlement removes a significant element of uncertainty and distraction for JDW and allows the company to focus on creating shareholder value through its core business activities as it continues its transformation.
The company said it has sufficient liquidity to meet the cash flow requirements of the settlement, including unsecured net cash of £82.9m as at 31 December 2022 as well as access to a RCF of £100m and overdraft of £12.5m, which are both fully undrawn as at 9 January 2023.
Payment is expected to be transacted before the end of January 2023. After satisfying the settlement the company will retain a strong unsecured net cash position with material additional liquidity facilities remaining undrawn, it said.
N Brown will release its third quarter trading and outlook update on Thursday, 12 January 2023.
