First published in The Herald on 9 October 2019
A GROUP of investors who collectively ploughed £230 million into an unregulated airport car-parking scheme have taken legal action against the companies and directors behind it in the hope of recovering at least some of their cash.
The scheme, which includes six car parks in the vicinity of Glasgow Airport, was launched by Lancashire-based Park First Group in 2016, with investors paying £20,000 per space in the expectation that they would make returns of between eight per cent and 12% a year.
Park First did initially honour those payments, but stopped paying out last year. In July this year it put the four businesses responsible for managing the investments and leasing out the parking spaces into administration, leaving investors fearing they will be left with nothing.
A group of 19 investors have instructed solicitor Patrick Lawrence of London firm Trainer, Shepherd, Phillips, Melin, Haynes to take action against six Park First entities as well as the company’s founder Toby Whittaker and directors Ruth Almond and John Slater.
Their claim, which has been filed in the High Court in London, alleges breach of contract, misrepresentation, fraudulent representation and negligent representation on behalf of the businesses and their directors.
Though the claim originally named the business entities only, the investors have updated it to include the three directors because, it is alleged, they were “the controlling minds who operated the collective investment scheme” and “the ultimate beneficiaries of it”.
“The claimants claim that the director defendants are personally liable to pay them compensation because they are so intimately connected with the operation and promotion of the unauthorised collective investment scheme, and that they were in a joint enterprise with the company defendants to operate a collective investment scheme,” the court document states.
The case is due to come before the court for an initial hearing on November 7. Ms Almond said it would be defended.
Separately, a group of Park First investors is attempting to prevent the administrators of Help Me Park Gatwick, Park First Gatwick Rentals, Park First Glasgow Rentals and Park First Freeholds from rescuing the businesses via Company Voluntary Arrangements (CVA), proposing that they should be immediately liquidated instead.
Smith & Williamson administrators Finbarr O’Connell, Adam Stephens, Emma Thompson and Andy McGill had proposed using CVAs to allow the companies to repay a portion of their debts over a set period of time while continuing to trade.
However, as that would have resulted in £115 million of debt being written off, a group of investors instructed insolvency practitioners Carl Jackson of Quantuma and Christopher Barrett of Dow Schofield and Watts to put forward the alternative proposal.
A spokesperson for the support group Investors in Park First said many investors prefer liquidation over the CVA plan because “it means they can look at where all this money has gone”.
The proposals were to be voted on at a creditors’ meeting held in London last week, but the meeting was adjourned before the vote could be held. In a letter to investors Mr O’Connell said he plans to extend the adjournment beyond the allowed 14 days.
“The administrators will be making an application to court for an order to extend the 14 day adjournment from 14 October 2019 in order to allow investors and creditors sufficient further time to receive, translate if necessary and consider the further communications from the administrators and to then […] return […] their votes on the administrators’ proposals and the modifications,” he wrote.
Problems with Park First came to light in 2017, when the Financial Conduct Authority highlighted that the company was not authorised to sell or run collective investments. Investors were subsequently given the option of selling their spaces back to Park First or converting their investment into a so-called lifetime leaseback, though none received the money they were due under either option.