Savers face £ 89million loss as defaulting property group goes to court

The life savings of hundreds of investors are at stake as a bankrupt real estate company has declared insolvency and is at risk of collapsing in the weeks to come.

More than 600 DIY investors have poured £ 89million into High Street Group ‘loan notes’, also known as ‘mini-bonds’, with the promise of returns of 12% per annum. However, they have since been barred from redeeming their money and the company has defaulted on their payment.

Directors of the High Street Group will sit in the High Court on December 16 to determine the company’s future and when it takes office. But the company may have been insolvent since 2018 despite continuing to take new investments until September of this year, it emerged.

Peter Murray, of Insolvency & Law, a claims firm representing a group with more than £ 4million invested, said earlier disagreements over accounts between former auditors and The High Street Group suggested the firm was insolvent three years ago. The company has since invested tens of millions of pounds sterling.

Mr Murray said he initially requested a full wind-up, but now supports a restructuring on the condition that an independent director be appointed. It is understood that The High Street Group proposed two directors who had previous ties to the company. Mr Murray said these people would have a “conflict of interest” and may not act in the best interests of investors. A spokesperson for the High Street Group said Mr Murray was acting in his own best interests, attempting to charge investors 10 percent for any funds recovered.

The ailing company has a net liability of £ 75million, ahead of a total of £ 212million while having just £ 136million in assets. However, investors have warned the company has only £ 500,000 of tangible assets that could be easily sold.

Mr Murray said he was concerned about asset transfers out of the company this summer. Last year the directors of the limited liability company, known as High Street Group Limited, established a separate entity, High Street Group plc.

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