A Shepherd Cox propaganda video has been produced and distributed to investors. Here’s a link to the full version. It’s quite interesting, but it is nothing more than propaganda dressed up to look like an impartial interview.
It has to be remembered that the Shepherd Cox propaganda video has been produced and presented by Brett Alegre-Wood of Gladfish Property Investment Ltd. This is a company which sold a large number of Shepherd Cox hotel rooms and is rightfully being questioned by its investors as to whether it has exposed them to illegal investment schemes. Gladfish investors may not even have known there was a problem because Lee Bramzell and Brett Alegre-Wood are buddies. Lee would have looked after Brett’s investors. But, regarding the investors in the Far East – well, Shepherd Cox doesn’t care about them. They can ask for their rentals as much as they like but Shepherd Cox has their money now.
Brett is very keen his investors do not question the Shepherd cox investment because it would lay Gladfish open to claims for compensation and seriously undermine his claims to be a “a London and UK property expert”.
At this point we could dissect the Shepherd Cox video minute by minute but that would be tedious. You can sit through the whole video if you like but it boils down to just three key points. Those are:
1. Shepherd Cox says the issue of unpaid rentals is not particularly significant. Lee Bramzell makes light of the claims. He also states that the six Shepherd Cox companies which have administration applications filed against them are solvent. Our response to that is that more than 100 investors are owed rentals which are on average 12 – 18 months overdue and if the companies are solvent then why haven’t those rentals been paid ? Shepherd Cox will have an opportunity to prove solvency when it submits its defence on 30th April.
2. The Brett and Lee double act claims an administration is expensive and investors are much better off sticking with Shepherd Cox. Shepherd Cox is a company which doesn’t pay rentals, sells rooms at grossly inflated prices, siphons money off to buy hotels for themselves in which investors have no ownership or entitlements, and which doesn’t tell the truth. In the Shepherd Cox propaganda video Lee Bramzell says Shepherd Cox sold rooms in six hotels. The truth is that it sold rooms in eight hotels. Lee is conveniently forgetting the Lymm and Knutsford hotels and we know why.
Brett’s carefully managed questions failed to mention the Knutsford hotel where Shepherd Cox sold rooms at £90,000 each and then bought them back off investors for £12,000 each. Just £12,000 each. That was a loss to every investor of £78,000. Very convenient that Brett Alegre-Wood didn’t question Lee Bramzell about that hotel.
Then there is the Lymm hotel where rooms were also sold at £90,000 each by Shepherd Cox. In 2018 they wrote to investors to say that an independent valuer had now valued the rooms at £30,000 each and it would make sense for investors to give up their leases for shares. Thank God investors were not stupid enough to do that. That’s another question Brett forgot to ask Mr Bramzell i.e how is it that in less than 3 years, rooms that Shepherd Cox sold for £90,000 were only worth £30,000 ?
It is worth pointing out that this valuation of £30,000 was provided by someone appointed by Shepherd Cox and was based on the business’ “income potential” and not on the actual value of a room if the business failed and the investor tried to sell the room. If it was based on actual room value it is likely the valuation would have come out very near the Knutsford price of £12,000. We have no doubt that the rooms in all of the six hotels are actually worth less than £15,000 each. That’s probably close to the amount of commission Gladfish were paid for selling them. That could be one of the questions Gladfish investors should ask i.e how much of our money went to your company ? An administrator would be looking at payments made to sales agents like Gladfish.
An administration does not have to be expensive at all. Shepherd Cox knows that because it has been down this road before. If Shepherd Cox comes up with a fair offer for investors, either before or very soon after the administration, then the costs can be very low. Shepherd Cox paid just over £7,000 in administration costs to purchase the freehold of a hotel so they know it can be done very cheaply. Brett and Lee were just trying to scare investors which is one of their tactics.
Another tactic is to try to persuade investors that there are no other people in the UK who can run hotels like Shepherd Cox when there are thousands. In fact, if investors wanted to run the hotels EXACTLY like Shepherd Cox i.e badly, then there are millions of people who can do that !
Yet another tactic is to make out that for investors to take action to recover their losses they would have to pay a lot of money. Well…. we’ve got bad news for Brett and Lee. We work with law firms who have access to funding and they are already well advanced on this case. We intend to go after every party which played a part in this investment irrespective of the outcome of the administration applications. The legal opinion obtained by the ten investors is very clear that the sale of hotel rooms to the investors was unlawful. We believe Shepherd Cox does not have the money nor the assets to repay all investors so other culpable parties will have to contribute, including Brett’s company Gladfish Investment Property Ltd.
3. Towards the end of the Shepherd Cox propaganda video we get to the real reason why it has been produced. It is all about trying to persuade investors to swap their room leases in the six hotels for shares in a new company which would own the six hotels.
We have said this before and we will say it again. We will keep saying it until Lee Bramzell and Nick Carlile realise that investors are not idiots. We will print it in bold so that hopefully the message gets across.
Investors paid £15m for their rooms. The leases give them some security. If investors swap leases for shares they will have no security for their investment.
Shepherd Cox is offering shares in six hotels which have a realistic value of around £4m-£5m in total. Shepherd Cox will retain 50% of the shares in the new company which will mean investors will own around £2.5m of assets. Even if Shepherd Cox makes arrangements for the investors to have preferential rights to the assets that is still only £5m maximum. If investors swap leases for shares Shepherd Cox could immediately close down the companies and investors would have written off at least £10m of their money.
DO THEY REALLY THINK INVESTORS WILL ACCEPT £2.5M OR £5M OF ASSETS FOR £15M OF THEIR CASH ? DO THEY REALLY THINK THAT’S AN ATTRACTIVE OFFER ?
There are now 55 investors who have joined our group. The group is seeking a full refund of the investment money + payment of overdue rent + costs. Our group will not accept any share swap arrangement unless Shepherd Cox provides strong security to protect the amount owed and guarantees the 8% per annum payment they are currently promising as a “preferential dividend”.
At the moment Shepherd Cox and Brett Alegre-Wood are pretending that the preference shares investors will be offered are guaranteed to pay 8%. This promise is false. In the UK dividends can only be paid out of profits. These Shepherd Cox hotels have not been making any profits. No profits = no dividend payments. Investors will not receive this promised income.
The share swap proposal only includes the six investor hotels. There is no way our investor group will only accept just those six hotels being included in a share swap agreement. The money paid by our investors + their unpaid rental arrears have been used to purchase and support other hotels in the Shepherd Cox portfolio. Our investors want those hotels included in any potential deal as security for their investment and the promised 8% dividend. Lee Bramzell and Nick Carlile are being very greedy and want to keep those other hotels for themselves, yet those hotels have been financed by the room investors.
Our investor group continues to grow. The Shepherd Cox propaganda video desperately tries to persuade investors to swap the security of their leases for shares in a loss-making group of hotels and false dividend promises. The Shepherd Cox propaganda video is an attempt to pressurise investors into surrendering their leases now, but investors don’t have to do that. They can still do that anytime in the months ahead if they wish. Investors are not stupid. They know there is a reason why Shepherd Cox is so desperate to get them to commit before the hearing and it isn’t because it is a better deal for investors.
When all is said and done we hope Shepherd Cox has a very good and realistic offer to make to investors before the court hearing. We believe the companies will have to go into administration no matter what offer is presented. It is then a question of the terms of that administration and whether the hotels are brought out of administration quickly and at low cost. That can be done. The UCIS allegation is serious and, if proven, would give investors a wide range of compensation options.
Shepherd Cox has the option of working with investors or opposing them. It has chosen to oppose them and is running out of time. If there is no settlement and the companies go into administration then investors will have absolutely no need for Shepherd Cox, Lee Bramzell, Nick Carlile and Adam Stanborough.
On a linked matter, the UK citizen who is taking action to recover a £800,000 loan given to Lee Bramzell and Nick Carlile has appointed a very capable lawyer.
To view our earlier article on Shepherd Cox please click here.
To view a more recent update to the Shepherd Cox case please click here.