Shepherd Cox Companies
Two more Shepherd Cox companies have been placed into administration. Those companies are Shepherd Cox Hotels (Durham) Ltd, the owner of Hallgarth Manor House Hotel, and Shepherd Cox Hotels (North Allerton) Ltd, the owner of Allerton Court Hotel.
The administrator acting for the six Shepherd Cox hotels which are already in administration issued demands to these two companies requiring them to return money transferred to them by one or more of the six companies.
Those following the Shepherd Cox story will know that ordinary investors paid around £16 million to buy rooms in the six hotels which Shepherd Cox had purchased for only £6.5m and a lot of money has gone missing.
The two companies did not return the money so the administrator filed applications with the court to have them placed into administration. The hearing was scheduled to take place on Monday 6th July.
Those applications were prevented from being heard by Luqa Ltd, a company domiciled in Malta and owned by Elliott Shaun Webster who was a former director of Shepherd Cox Hotels (Holdings) Ltd from June 2017 to March 2019 (see Companies House entries relating to Elliott Shaun Webster HERE and HERE).
Shepherd Cox Hotels (Holdings) Ltd is the top company in the entire Shepherd Cox group structure. This is the company which co-ordinated the money transfers between the various Shepherd Cox companies. This makes Elliott Shaun Webster more than just an arms’ length lender in our book. It makes him a party to the scheme.
On Friday 3rd July, Luqa Ltd jumped in and filed its own administration application over the two companies (which it was entitled to do having a first charge over their assets). Those applications were granted thereby causing the applications backed by investors to fall away. It needn’t have done that because it could have allowed the hearing on the Monday to go ahead. Luqa’s loan was protected so it could not lose out financially. We regard the Luqa intervention as a hostile act against investors and in support of its friends in Shepherd Cox.
Luqa Ltd has been involved in many of the Shepherd Cox schemes since the early days. It lent the initial capital to several Shepherd Cox companies, including some which went on to sell bedrooms to investors (The Sandpiper Hotel in Chesterfield and the Comfort Inn in Manchester North).
Luqa Ltd has chosen to appoint its own administrator and not to appoint the administrator dealing with the other Shepherd Cox companies. Why would Luqa jump in to prevent the administrator dealing with six other Shepherd Cox companies from gaining access to the bank accounts and internal company records of these two companies ? Is Elliott Shaun Webster a friend or foe of investors ? It’s looking very much that Luqa Ltd is much more of a friend to Shepherd Cox than it is to ordinary investors. This makes us wonder if there are transactions inside those companies that some people would not like to be brought out into the open.
Interestingly, there has been a lot of focus on the original six hotels but not so much on Hallgarth Manor Hotel owned by Shepherd Cox Hotels (Durham) Ltd. Bedrooms were sold in that hotel too. They slipped under the radar because Shepherd Cox “bought out” those investors and cancelled their room leases. We have put inverted commas around the term “bought out” because they didn’t actually give investors the money they had paid for their rooms. They made a small payment as a sweetener to encourage the deal, but they lied to investors telling them what a successful group Shepherd Cox was and that room owners would be far better off SWAPPING their room leases for shares in Shepherd Cox Hotels (Durham) Ltd. The majority of investors agreed to swap, but a few did not. Those that did swap are now left with worthless shares. This was exactly the same deal Lee Bramzell was trying to sell to investors in the original six hotels to prevent them from going into administration.
Once the majority of leases at Hallgarth Manor had been given up you can guess what happened next. Luqa Ltd lent more money to the Shepherd Cox companies and secured it over Hallgarth Manor because it was now almost entirely lease-free. The circumstances surrounding those share swap transactions would have been looked at very closely by the administrator of the six companies because the statements made by Shepherd Cox were false and misleading, but we doubt that Luqa’s administrator will be interested. It has a client to protect.
A further eight Shepherd Cox companies have administration applications filed against them for non-payment of monies owed to the original six companies. Those eight were not stopped by the actions of Luqa Ltd and were presented in court on Monday 6th July. The case has been adjourned for a short period of time. We will report on events when the court reconvenes for the second hearing. The companies are:
1. D & B Investment Properties Ltd – residential property;
2. Shepherd Cox Hotels (Cheltenham) Ltd – The Charlton Kings Hotel;
3. Shepherd Cox Hotels (Croft-on-Tees) Ltd – The Croft Hotel;
4. Shepherd Cox Hotels (Durham City) Ltd – The Town House Hotel;
5. Shepherd Cox Hotels (Halifax) Ltd – The New Hobbit Hotel;
6. Shepherd Cox Hotels (Leeming Bar) Ltd – The White Rose Hotel;
7. Shepherd Cox Hotels (Stokesley) Ltd – The Chapters Hotel;
8. Shepherd Cox Ltd – the sales arm of Shepherd Cox which has been selling hotel rooms to investors since 2013.
It will be interesting to see whether Luqa intends to intervene in Shepherd Cox Hotels (Halifax) Ltd because it has a charge over that company. It would be wasting its time if the intention is to cover up details of transactions. There is a lot of attention focused on the Shepherd Cox Group and we will keep chivvying away until the truth is out.
A while ago we formed an investor group to pursue recovery actions against some of the parties involved in the Shepherd Cox scheme. Terms have been agreed with a law firm and clients are currently being onboarded. We are looking forward to helping our international client base recover as much of their investment as they can.
To read our previous article on Shepherd Cox please click here.
To view our more recent update on Shepherd Cox please click here.