Savers face £89m loss as failing property group goes to court

0
48

The life savings of hundreds of investors are on the line as a failing property firm has declared insolvency and risks collapsing in the coming weeks.

More than 600 DIY investors poured £89m into The High Street Group’s “loan notes”, also known as “mini-bonds”, on the promise of 12pc returns per year. However, they have since been blocked from redeeming their money and the company has defaulted on payments.

Directors from The High Street Group will sit in front of the High Court on Dec 16 to determine the future of the firm and whether it enters administration. But the company might have been insolvent since 2018 despite continuing to take on new investments as late as September this year, it has emerged.

Peter Murray, of Insolvency & Law, a claims firm representing a group with more than £4m invested, said previous disagreements over the accounts between former auditors and The High Street Group suggested the firm was insolvent three years ago. The company has since taken in tens of millions of pounds worth of investments.

Mr Murray said he had originally called for a complete liquidation but now backed a restructure on the condition that an independent administrator is appointed. It is understood that The High Street Group has put forward two administrators who had previous ties with the business. Mr Murray said these individuals would have a “conflict of interest” and may not act in the best interests of investors. A spokesman for The High Street Group said Mr Murray was acting in his own interest, attempting to charge investors 10pc for any recovered funds.

The struggling company has a net liability of £75m, owing a total of £212m while having just £136m worth of assets. However, investors have warned the firm only has £500,000 worth of fixed assets that could be easily sold.

Mr Murray said he was concerned about transfers of assets out of the company this summer. Last year, directors of the limited company, known as High Street Group Limited, set up a separate entity, High Street Group plc.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

19 + = 26