In what must have been a busy week for the High Court, five companies, two involved in a dishonest land banking scheme, and three related companies with reported assets of £445million worldwide, have been ordered into compulsory liquidation in the public interest.
A £1.5million land banking scheme
Two Liverpool-based companies were subject to a successful winding up petitions and ordered into compulsory liquidation by the High Court for their part in facilitating a £1.5million land banking scheme. JDG Properties Ltd and Tithebarn Trading Ltd were found to be involved in transactions that sold plots of undeveloped land to investors, despite it being extremely unlikely that planning permission would ever be granted.
An Insolvency Service investigation revealed that JDG Properties was the land owner in this case, and benefited to the tune of 100 percent for every plot of land that was mis-sold by a hired company, Gilbert Webb Estates, which marketed the land to investors.
JDG Properties traded under the umbrella of ‘Liverpool Investment Solutions’ and had bought the land in Chestnut, Hertfordshire, for just £130,000. It retained a quarter of the site and divided the rest into 390 plots for sale to the public.
The development company…
Tithebarn Trading Ltd’s role in the mis-spelling of the plots was to act as the development company in the transaction, despite the complete lack of any planning permission. It entered into five-year option agreements with some of the investors to buy back their plots at a price of £52.43 per square foot, attributing a market value of over £20million to the site.
However, the director of both companies, a Mr Elster, admitted in court that obtaining planning permission for the site would be like ‘winning the lottery’, such was the unlikelihood that permission to develop the land would ever be granted.
‘The scheme made no commercial sense’
Welcoming the court’s decision to put an end to the dishonest companies, Chris Mayhew, Company Investigations Supervisor, said: “Whilst neither of Mr Elster’s companies was directly involved in the sale of the plots to members of the public, they were symbiotic to the land banking scheme and fortified the mis-spelling of plots of land by Gilbert Webb Estates Ltd, enabling all involved in the scheme to profit, apart from the investors.
“In reality, the scheme made no commercial sense and was designed simply to part honest people from their cash.”
£445million companies ordered into provisional liquidation
The next tale of dishonest trading involves three related London companies, Genz Holdings Ltd, Gafo Me UK Ltd and Greens LD Ltd, which reportedly held assets worth £445million worldwide. The three companies have been ordered into provisional liquidation following winding-up petitions presented by the Secretary of State for Business, Innovation & Skills.
The Official Receiver has been appointed by the court as the provisional liquidator of the companies. Their role is to protect the assets and financial records of the companies pending the petition hearing. The provisional liquidator also has the power to investigate the affairs of the companies and protect any trust or third party monies currently under the companies’ control.
Unfortunately, as the petitions have yet to be heard by the court, no further information about the case is currently available. However, after next month’s hearing, we’ll have full details of the case for you. If you are subject to the threat of a winding up by any creditor you must take it seriously so contact us immediately for fast effective experienced help.