15.4 C
London
Sunday, July 12, 2020

House mini-bond maker House Blackmore faces legal action from angry investors over missed payments

Investors in the mini-bond vendor Blackmore Bond have launched an offer to liquidate the company, investigating its problems as it struggles to raise money during the coronavirus crisis.

A group of bondholders joined to present a High Court liquidation petition against the company, which lost its last quarterly coupon payments.

A bondholder who invested thousands said, “It is very difficult not to know what is going on. If we knew what was going on with our money, we could at least start moving on with our lives. Not knowing is really harmful.”

Blackmore raises funds from the public by issuing so-called mini-bonds. Use the money to build houses, then pay a return on sales profits. His problems began to surface in October last year when he lost a quarterly interest payment.

In an update to bond holders last month, Patrick McCreesh, chief executive officer, told investors that the Covid crisis would put a “further strain” on the company as the real estate market freezes over.

He added that it was difficult to evaluate properties during the block, but that there were still only two evaluations to complete. Its developments include owned homes in Ealing and a converted farm in Longridge.

The bondholders’ lawsuit against Blackmore comes when other company lenders are said to have taken steps to protect themselves while the trustee, Oak Fund Services, raised concerns that security given to some lenders will push Blackmore’s 2,500 bondholders in line .

Meanwhile, KPMG, which was helping Blackmore prepare a bondholder report, is no longer involved in the company and has been replaced by Dow Schofield Watts since March 23rd.

In a letter on Thursday, Oak Fund Services told bondholders that lenders took control of some Blackmore properties in March, including in Liverpool and Birmingham, by naming receivers. He added that Goji Financial Services, who is Isa manager of Blackmore’s Series 4 bonds, was asking for a refund.

The Oak Fund also said that in February and April Blackmore had borrowed money against certain properties and that this “could well affect the bondholders’ security position.” Much of the loan was granted by West One Loan.

Mini-bond sellers are under increasing scrutiny after the collapse of London Capital and Finance earlier last year, which went bankrupt due to around £ 237 million to around 11,600 ordinary investors.

Blackmore declined to comment. Oak Fund Services said, “The trustee is working to protect the bondholders’ interests and will provide a further update for the bondholders shortly.”

.

Latest news

Government “ax stamp duty for six months on homes worth up to £ 500k”

According to the report, the Chancellor is expected to announce a six-month stamp holiday to help the UK housing market. Rishi Sunak...

Post-lockdown ‘unrecognizable’ Magaluf with empty streets and ‘chaos’ restaurant – World News

Brits flying to Magaluf's post-lockdown could be greeted with an "unrecognizable" ghost town. The holiday spot on the island of Majorca is...

Aston Villa boss Dean Smith complains about the Premier League rule after the defeat of Liverpool

Aston Villa manager Dean Smith complained of the five substitutes' provisional rule after seeing his team lose to Liverpool. Sadio Mane and...

No social distance as the pubs open on Super Saturday

Old Compton Street in Soho, London, was full of drinkers on "Super Saturday" despite the strong police presence. (Justin Tallis / AFP via...

Related news

Government “ax stamp duty for six months on homes worth up to £ 500k”

According to the report, the Chancellor is expected to announce a six-month stamp holiday to help the UK housing market. Rishi Sunak...

Post-lockdown ‘unrecognizable’ Magaluf with empty streets and ‘chaos’ restaurant – World News

Brits flying to Magaluf's post-lockdown could be greeted with an "unrecognizable" ghost town. The holiday spot on the island of Majorca is...

Aston Villa boss Dean Smith complains about the Premier League rule after the defeat of Liverpool

Aston Villa manager Dean Smith complained of the five substitutes' provisional rule after seeing his team lose to Liverpool. Sadio Mane and...

No social distance as the pubs open on Super Saturday

Old Compton Street in Soho, London, was full of drinkers on "Super Saturday" despite the strong police presence. (Justin Tallis / AFP via...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.