Shepherd Cox Administration
On 28th May 2020 the Judge hearing the Shepherd Cox Administration Applications ordered six Shepherd Cox hotel companies into administration.
The case was brought by ten investors from Asia who had contacted Safe Or Scam. They had bought hotel rooms in the six hotels. In the end they were supported at court by another 54 investors also based in Asia.
From 2014 onwards Shepherd Cox Ltd, the entity used by Lee Bramzell, Nick Carlile and Adam Stanborough as the primary sales company, aggressively sold hundreds of hotel bedrooms to investors in the Far East, later involving UK sales agents such as Brett Alegre-Wood of Gladfish Property Investment Ltd in the UK.
Under the terms of the investor contracts they were entitled to guaranteed quarterly rental payments which Shepherd Cox had ceased paying as far back as 2018.
Shepherd Cox accepted that one of the companies was insolvent, but argued that another one was solvent in its own right and the other four companies were solvent because they would be supported financially by one of the Shepherd Cox hotel companies not involved in the administration
The financial information provided by Shepherd Cox was analysed by the investors’ team and exposed as inadequate and incapable of supporting any of the companies, including the one that Shepherd Cox had claimed was solvent in its own right. The Judge agreed with those findings.
The companies affected by the Administration Order are:
1. Shepherd Cox Hotels (Sedgefield) Ltd; and
2. Shepherd Cox Hotels (Hartlepool) Ltd; and
3. Shepherd Cox Hotels (Bicester) Ltd; and
4. Shepherd Cox Hotels (Darlington) Ltd; and
5. Shepherd Cox Hotels (Manchester North) Ltd; and
6. Shepherd Cox Hotels (Chesterfield) Ltd.
In a recent choreographed video produced by Brett Alegre-Wood and Lee Bramzell, Mr Bramzell stated that the investment was not an unlawful investment scheme because Shepherd Cox had taken “leading counsel advice” at the very beginning and if the investment was found to be unlawful Shepherd Cox would be able to sue the counsel. Shepherd Cox did not submit the alleged counsel advice to the court. This leads us to assume that either Mr Bramzell was not telling the truth and Shepherd Cox never took any advice, or the advice does exist but Shepherd Cox did not follow it. It is very unusual for a defendant to claim it has a “Get Out of Jail” card (metaphorically speaking) and then not use it in evidence to defend its position.
In letters to investors leading up to the hearing Shepherd Cox stated that more than 100 investors had agreed to swap their leases for shares in a restructured Shepherd Cox company. We always suspected that was not true and no evidence confirming that statement was submitted to the court.
During our investigation into the Shepherd cox companies we found that when the Grand Hotel in Hartlepool was bought by Shepherd Cox in August 2015 it was described as a 48-bedroom hotel. The hotel website describes The Grand Hotel as a 48-bedroom hotel – see here. Documents produced by Shepherd Cox in July 2019 describe the hotel as being a 48-bedroom hotel and two members of Shepherd Cox’s management team at the hotel wrote last month confirming that The Grand is a 48-bedroom hotel.
However, 57 hotel bedroom leases are registered at the Land Registry and have been sold to investors.
In July 2016 permission was granted by Hartlepool Council to convert staff accommodation and store rooms into additional bedrooms. Nine en-suite bedrooms were then immediately sold to investors in Asia.
Shepherd Cox argues that the nine investors were aware that the bedrooms had not been constructed at the time they paid for them, but the investors we have spoken to emphatically deny that. They say they were told that the en-suite bedrooms existed and were no different to the other 48 bedrooms. Keystone Law, representing the Shepherd Cox companies, has confirmed that the rooms exist (which we already know because they were staff accommodation and store rooms etc), but has thus far not responded to our request for confirmation that the rooms exist as furnished, en-suite bedrooms which have been let to paying guests. We find it hard to believe the hotel would construct nine new bedrooms and then not update the website, not include the new bedrooms in its own publications and not inform its management team that The Grand was now a 57-bedroom hotel !
Investors bought those bedrooms in August 2016. Shepherd Cox Hotels (Hartlepool) Ltd immediately began paying the guaranteed rentals to the investors and continued to do so for more than two years, thereby reinforcing the investors’ belief that the en-suite bedrooms exist. The owners of those nine rooms are now very keen for the hotel to reopen so they can see exactly what their “en-suite bedrooms” look like.
If the £540,000 raised from these investors was not used to convert the rooms where did it go ? If it has not been used to construct the bedrooms would that constitute obtaining money by deception ? There are still many questions to be answered.
The sales agent in Asia is the subject of a local Police criminal investigation.
Keystone Law also represents Lee Bramzell and Nick Carlile in the personal debt claims made against them by investors who were persuaded to convert loans they had made to Shepherd Cox companies into personal loans with both men.
Our representatives in Asia will be liaising with the investor group to help them achieve the best possible outcome.
To view our previous article on Shepherd Cox please click here.