Saturday , September 18 2021

Investors face a loss of more than £ 10 million in hotels, and Elliot Lawless’s money is safe

Investors in hotel development on the Liverpool coast are facing a loss of more than £ 10 million, ECHO may reveal.

Norfolk Street Hotel and Residence Limited, which was behind the plan to build a trendy hotel in the heart of the Baltic Quarter, entered the administration earlier this year.

The venture was backed by Liverpool businessman Elliot Lawless, owner of the Elliot Group. Mr Lawless has two charges on the website totaling £ 1,119,717. The trustees’ report reveals that he will be reimbursed for that money.

READ MORE:Violators of Merseyside rules who have been taken to court

The company, a subsidiary of the Elliot Group, went bankrupt after a court hearing on March 5.

Investors, who have invested a total of £ 10,851,533, are now facing huge losses.

The report states how the first group of investors, who invested £ 9057,423, is expected to recover £ 6.5 in a pound. That means they will lose £ 8,468,690.51

The second group, which invested £ 1,794,110, is expected to recover £ 3.9p per pound, meaning it is expected to lose £ 1,724,139.71. Investors as a whole are now facing a loss of £ 10,192,829

The report reveals that Mr. Lawless has two allegations on the website through Virtuoso Investments Ltd and Equity Group Ltd. The costs of £ 919,717 and £ 200,000 are to be paid in full.

The report also reveals that the site is now estimated to be worth around £ 2 million.

Trustees also reveal that controversy around the Liverpool world has made it difficult to sell the site in the past year.

The report reads: “The political situation with the Liverpool world and the history of the site have deterred some potential buyers and influenced the marketing of real estate by receivers.”

According to the Land Registry, the Liverpool council sold Equity Group Limited, a Seychelles-based 82-94, in March 2017 for £ 925,000.

The site was then transferred from the Equity Group to Norfolk Street Hotel & Residence Limited for a payment of £ 4,745,000.

Earlier this year, ECHO revealed how the value of the site had increased by 510%. Mr Lawless told ECHO that the price difference represents a “profit in planning”, which benefits developers if their plans are approved by the local authority.

A committee is now set up to represent the majority of investors in the scheme.

A spokesman for the committee expressed concern over two allegations made by Virtuoso Group and Equity Group. Duties are a type of mortgage.

A spokesman said: “We are pleased that trustees are scrutinizing Mr Lawless’s allegations in the Seychelles, but this task needs to be completed first, not rushing sales and creating huge losses for individual investors.

“We have so much more at stake than this offshore company”

Mr Lawless cited his arrest in December 2019 as the reason for the collapse of the scheme.

Mr Lawless was arrested on suspicion of conspiracy to commit fraud, bribery and corruption. The developer vehemently denies any violation and successfully challenges the legality of the tasks the police used to search his home and office.

He said: “This is another victim of my arrest in 2019 that has had a major impact on my business. Prior to my arrest, the Elliot Group was never involved in a single failed project and delivered more than two and a half thousand units in nineteen schemes.

“The consortium of investors has decided that it no longer wants to fund the hotel, and in addition, the arrest has prevented alternative funds from completing the project. The applicants decided to stop funding the project and were aware that this was jeopardizing their funds. My company continued to fund the main contractor for several months to keep the scheme on track while investors decided how to proceed. As the largest single investor, I worked incredibly hard with other investors to find a solution.

“Initially, we agreed to name the LPA receiver to provide the best value for the asset and it sold it on the market for three months, but received only one offer. In the end, the potential buyer withdrew, but at least we set the market price for the value of the site, ”Mr. Lawless explained.

The recipient of the LPA disclaims any liability to the lender and manages the efficient sale and management of debt collection assets.

Mr Lawless added: “A consortium of investors offered to buy my interest at the price offered by the proposed buyer and I agreed to the sale. I would allow them to take control of the location on their own and complete the scheme, as investors in my Aura and Residence schemes do. Unfortunately, there was disagreement among the investors, so they withdrew the offer. We then put the scheme under management in agreement with the investors. The trustee has also marketed the property heavily in the last four months.

“Investors have not contacted me since to try to revive the deal. Under the rules that a trustee must operate, the site gets the best deal, and I would be happy to continue working closely with trustees and the consortium to find the best way to generate the highest returns for all investors. “

The construction site of the Epic Hotel at the bottom of Norfolk Street and Chaloner Street.
The construction site of the Epic Hotel at the bottom of Norfolk Street and Chaloner Street.

Mr Lawless is now the subject of an insolvency investigation. The developer said the matter is routine.

Richard Kemp, leader of Liverpool’s Liberal Democrats, has previously expressed concern about why the Liverpool Council sold the website to a sea-based company. He also expressed concern at the fact that Mr Lawless had paid £ 925,000 for the land, which was later estimated at more than £ 5 million.

Earlier this week, Cllr Kemp said in a statement to ECHO: “The way managers reduce initial investors to zero is perfectly legal, but completely immoral.

“These are people from all over the world who were convinced that Liverpool would be a good place to invest, and the developers and one-sided legal system have left it in the lurch.

“In November last year, the Council prepared a report that there were 39 halted events in the city, and also said that they were asking for the help of a combined body to solve problems under the scheme under the scheme. To date, I have seen nothing and what they are doing must be too little and too late for what investors find difficult to do.

“The council must now take action to ensure that the city’s reputation is not permanently damaged by the consequences of the inability of its own regeneration department.”

John Waller for HBG Advisory, administrator of the Norfolk Street Hotel, said: “Administrators are court clerks and are required to assess all claims against the company, including securities. This is an ongoing process.

“In the meantime, the property has been openly marketed for many months, and several offers have already been received.

“The trustee’s duty remains to provide the best offer for the property to provide creditors with the best possible return.”

A council spokesman said: “Liverpool City Council recognizes investor correspondence.

“Council officials will soon meet with representatives of investors in the scheme to discuss their position.

“The council is currently reviewing the contractual situation and will examine its implications for the council and the website in a timely manner.

“The Council cannot comment on the administrative procedure.”

The Liverpool Council is currently working with partners to identify bottlenecks where progress can be made. This process is expected to be completed by next spring.

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