Investment schemes run by former Bury FC chairman collapse; administrator predicts total losses for investors

Mederco, headed by Stewart Day, operated a number of unregulated property investment schemes.

Stewart Day
Mederco managing director Stewart Day

In one, Mederco built out 160 flats in Appleton Point, Bradford, and sold the flats to a wider number of investors, with a guaranteed yield of 9% for five years, and an agreement to buy back the flats at an uplifted price.

The freehold of Appleton Point was sold in May 2015 to E & J Ground Rents No 1 LLP for £850,000, who subsequently leased the basement car park back to Mederco for 999 years at a peppercorn rent. Mederco then sold the car parking spaces to another batch of investors for £9,995 each, again for a guaranteed yield of 9% for five years with an uplifted buy-back after that.

In another, Mederco leased 258 car parking spaces from Bury Football Club for 24 years, and then sold sub-leases in the parking spaces to investors for £9,995. Mederco committed to paying the investors 9% per year for 5 years.

Both these investments collapsed when HMRC issued a winding-up petition, claiming £605,000 in unpaid VAT on the car parking spaces. Day then appointed administrators.

These administrators have predicted that investors in the Appleton Point and Bury FC car park investment schemes will lose 100% of their money.

At present, it is considered unlikely that there will be sufficient funds available to enable any form of distribution to unsecured creditors.

Appleton Point was found to have “significant fire safety issues”, and in February 2019 the entire population of Appleton Point was evacuated from the building until it can be made safe.

Responsibility for making the building safe ultimately rests with the company Mederco sold the freehold to for £850,000 in 2015. Naturally, Mederco’s parking spaces are worthless until the building has been made safe.

Three other Mederco companies, Mederco Cardiff, Mederco Glasgow and Mederco Richmond Road, are also in administration. Over 100 investors placed deposits of 25-75% for as yet unbuilt studio flats. A total of £9.26 million is owed to unsecured creditors, with £6.46 million owed to the troubled P2P platform Lendy.

The Bury Times continues:

In the case of Mederco Glasgow, land close to the city’s High Court was identified and planning permission secured in late 2016 for 169 apartments, with a residents’ gym, cafe and laundry.

Mr Duffy and his colleague Steven Muncaster were appointed as joint administrators and found that the Glasgow company had become insolvent after considerable sums were left owing to a secured creditor, again part of Lendy Ltd, before construction had even begun.

An estimated £4.5million was owed, set against the property’s value, of around £3.26million.

Mederco Richmond Road was based around a site which formed part of the Bradford Learning Quarter and planning consent was gained in 2011 and modified in 2014.

Mr Duffy said in a further report that, again, this company had become insolvent before construction had started, with Lendy Ltd owed £2.9million, against potential assets of £1.2million.

Promoter of the Bury parking space scheme goes into voluntary liquidation

Principal Choice Limited, trading as Principal International, promoted the Bury parking space scheme on its website. Principal Choice Limited is owned equally by Derick Ivimy, Roger Ivimy and Simon Ryeland.

Principal Choice Limited went into voluntary liquidation in March 2019. Unlike Mederco, Principal Choice Limited is not insolvent; the purpose of the voluntary liquidation is to distribute the assets, estimated by the directors at £171,000 net of costs, to be distributed to the shareholders.

Principal International’s website has now been taken over by Aspect Global Holdings Limited. Aspect Global Holdings is wholly owned by Aaron Campbell, who took over the company in August 2018. Prior to that, it was owned by Aspect Global Limited, in which Simon Ryeland was (and is) a shareholder and director. A Mark Ivimy was also director of Aspect Global Holdings Limited until August 2018.

Principal International’s website now displays generic news items about the property industry and does not appear to be promoting any investments.


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