Park First Creditors Meeting Ended in Victory For Investors

Park First Creditors Meeting Ended in Victory For Investors

Park First Creditors Meeting Ended in Victory For Investors 7858 3350 Safe or Scam Support

On 1st October 2019 the Park First creditors meeting ended in victory for investors. The Administrators were seeking to wipe off £115m of debt, prevent an investigation into the conduct of the Park First directors and restructure the investment leaving the existing failed management in place. Safe Or Scam clients, in unison with other unhappy investors and insolvency specialists, helped to ensure that the attempt to force through a shocking proposal was thwarted.   

 The Administrators were forced to adjourn for a period of 14 days with a new hearing scheduled to be held on Monday 14th October.

Although only a few days have passed the Administrators have advised certain creditors that they will no longer be holding the meeting on the 14th October and that they will be applying to court for an extension to the adjournment. The Administrators have not confirmed when the application will be submitted or when they intend to actually hold the adjourned meeting.

 At the meeting on the 1st October Mark Hendrick from Quantuma LLP was present, along with Ben Barrett and Lisa Moxon from Dow Schofield Watts representing a considerable number of investors. Safe Or Scam and our clients are strongly opposed to the Administrators’ proposals and have been mobilising creditors to ensure that the proposals are rejected. We have been advocating that Quantuma LLP & Dow Schofield Watts be appointed to act as joint liquidators in this matter because they can be relied upon to better represent the interests of investors.

To be clear, THE PURPOSE OF THE MEETING OF CREDITORS IS PURELY TO CONSIDER THE ADMINISTRATION PROPOSALS AND TO EITHER ACCEPT OR REJECT THEM.  THIS ALLOWS FOR ANY ALTERNATIVE PROPOSAL TO THEN BE VOTED UPON. The alternative proposal of Quantuma and Dow Schofield Watts that was being proposed was not put before the meeting (and everybody present) as it should have been. 

In addition, UK Insolvency legislation clearly sets out that Administrators must circulate a list of creditors with their proposals. The Administrators have failed to do this. They confirmed at the meeting that the list would be made available, but they have ignored requests to provide it. This has the effect of preventing any dialogue between investors to allow investors to collectively decide on the best way forward.

 It was made very clear at the meeting that investors want a full investigation to be undertaken into the actions of the directors and the affairs of the companies. The investors do not want the current management of the companies to have any say whatsoever in the ownership of the business going forward (as is currently proposed). 

It should be remembered that the Administrators, who themselves were introduced to the Park First companies by the solicitors that were advising the business (and continue to do so) since 2017, are still working with those solicitors and they were present at the meeting advising the Administrators.

The Administrators have suggested that they will make a proposal for a company voluntary arrangement (CVA) but have not been able to provide any detail around that proposal to date (except that £33 million will be made available to the creditors if the CVA is approved and the properties will be excluded from the CVA). This is despite that fact that the Administrators have been in office since July 2019 and have had ample time to provide the necessary detail. The Administrators told the meeting that they will not inform creditors of valuations that they obtain on the properties. It is difficult to understand how creditors will be able to choose a CVA over a liquidation without knowing what the properties are genuinely worth. 

If a CVA is approved, investors should be aware that the Administrators are anticipating that they will become Supervisors of the CVA. Supervisors do not have powers to investigate the directors’ conduct before the insolvency of the companies and do not have the right to bring court claims against the directors in that respect. We believe a complex and clever cover-up is taking place. Unfortunately the law in the UK allows this kind of tactic to be used. 

What is abundantly clear is that there is a £150m black hole that needs investigating. These are investor monies that cannot be accounted for by the administrators. A liquidator has very significant powers of investigation and recovery of monies. A supervisor of a CVA has no powers of investigation or recovery in respect of actions arising before the Company went into the CVA.

This is why our clients are proposing that the companies go into liquidation and independent liquidators be appointed with no connection to the directors or any other party that previously or currently has a connection to the companies. It was suggested at the meeting that the £32m of the £33M currently held to the order of the FCA (and the connected company) would only be available to creditors if a CVA is accepted. This does not appear to be correct. The FCA appears to have sufficient control over these monies to prevent them from being released without their consent and the FCA intends those monies to be used for the benefit of the buy-back creditors regardless of whether the companies are in administration, CVA or liquidation (see . In any case, it would be open to a liquidator to bring court proceedings to look to clawback those monies into the estates of the companies for the benefit of the creditors. The Administrators confirmed in the creditors meeting that £10m of investor monies had apparently been used to purchase the Luton land to which the £32m relates.

The meeting itself laboured the point of investors having either a leasehold or buyback claim in the proceedings. Investors were informed by the administrators and their legal counsel that investor claims “may be treated either way” and once the CVA and only once the CVA is approved will this become clear. When questioned at the meeting the administrators confirmed that the only trading car parks that are currently operating are turning over £6m per year. This is turnover alone, not profit, which will be considerably less. This is not enough to support the returns promised to investors.

The administrators have a duty to now write to investors to inform them that the meeting was adjourned and indicate that there is an alternative being proposed. We are recommending that investors support that alternative as it is much more preferable to that proposed by the Administrators.  

Unfortunately, the Administrators have not provided a timeframe for this and can continue to act without any interference from creditors in the interim. Our clients do not believe that this is an acceptable position for investors.

Safe Or Scam is currently discussing with Quantuma and Dow Schofield Watts and their legal advisors a strategy of how to protect the interests of investors.  Full details of the proposed strategy will be circulated to investors in the coming days.

Any investor who was unable to attend the meeting or who would like to understand their rights as a Park First investor should email Mark at Quantuma, or Lisa at DWS Recovery, or Safe Or Scam via our Contact Page.

To view our previous article on Park First please click HERE.

To view a more recent update on Park First please click HERE.


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