Blackmore investors approach restructuring and insolvency specialist

Blackmore logo 2019

According to the Times, a group of Blackmore Bond investors has approached restructuring and insolvency specialist Duff & Phelps in the hope of getting answers about their investment.

Blackmore has been in default of interest payments since October. It has told investors recently that payments will be made “imminently” once it has sold some of its properties.

Investors have asked Blackmore to appoint Duff & Phelps to carry out a review of Blackmore’s business. Blackmore has declined.

Regular readers may be familiar with the name Duff & Phelps as they have been appointed administrators of the Carlauren Group, a £76 million unregulated care home investment scheme which collapsed last year under allegations of Ponzi fraud.

As it stands Blackmore is in default of its loans from investors but is not insolvent or in administration.

That a group of investors are speaking to a restructuring and insolvency practitioner is a serious development. Even if Duff & Phelps are appointed in an advisory capacity, they will not come cheap.

And if they had a magic solution that would allow Blackmore to turnaround its business and start generating the 15% per year returns it requires to make its interest payments to investors after accounting for the cost of commission paid to its introducers, they wouldn’t be in the restructuring and insolvency business. If they knew how to generate 15% per year returns, every business owner in the country would be beating down their door.

Anyway, as it stands Blackmore insists that it doesn’t need any magic solution, and that it will get back on track with interest payments as soon as it has sold some property.

Having been rebuffed by Blackmore, the investor group which contacted Duff & Phelps now has to decide whether to use their missed interest payments to take Blackmore to court and force the issue, or leave Blackmore directors Philip Nunn and Patrick McCreesh in charge and cross their fingers.

13 thoughts on “Blackmore investors approach restructuring and insolvency specialist

  1. Two things:-

    First “…but is not insolvent…” how do we know this? It hasn’t yet published audited accounts, overdue since 27th Dec?

    Second, “… as soon as it has sold some property.” What are the chances?

    Given one of it’s first projects, a disused church conversion – St Augustine’s Cheadle Heath, bought in 2017 – into 9 apartments, due for completion in early 2018, now has an estimated completion of Oct 2020 according to their website. If they can’t even do that project in less than 3 years how likely is it their other projects are just haemorrhaging money?

    I suppose they could sell “unfinished” projects to another developer but that is unlikely to produce anywhere near enough “profit” – if any – since they were counting on a sizeable margin in order to pay the interest on the money loaned to them by investors to carry out the projects in the first place.

    The delay to the accounts, the resignation of their auditor – Grant Thornton – in the summer of last year, the resignation of their chairperson in Nov and the resignation of the company secretary in December do not paint an encouraging picture. Circumstantial though it may be, Tweedledum & Tweedledee are known for spinning a few yarns. They never tell the whole truth. It’s just a matter of time before investors learn they have lost all their money …. brace yourselves for it.

    If you are of high net worth or a sophisticated investor then this will just be “one of those things”, “no big deal” and you will recover. If however, as suspected, you are neither and have sunk your life savings into this then I feel for you – it’s all gone.

    For almost the last decade Tweedledum & Tweedledee have left hundreds of victims facing financial ruin in their wake without any remorse and I have no doubt you are going to be the latest addition to that group.

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  2. Blackmore has so many similarities with LCF ever since the latter went belly up it feels like everyone involved in finance has settled down in a comfy chair with some popcorn to watch a slow motion car crash of Blackmore going the same way.

    Sadly the investors are real people most of whom will turn out to be unsophisticated and can’t afford to lose their money.

    Despite the inevitability as always the FCA is uninterested in getting involved until it fails at which point they will act all surprised.

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  3. Except I am not “…involved in finance…”. I am a victim of one of their previous scams in 2015 and been waiting for “justice” ever since …. although I doubt I will ever see justice!

    There is no such hope with our limp, impotent authorities!

    The FCA didn’t give a … and allowed the unregulated “adviser” and his co-director continue their promotion of UCIS’s to “retail” clients; tweedledum & tweedledee later (July 2016) switched to unregulated mini bonds – but still have victims in their unregulated opaque offshore fund, Blackmore Global.

    … and the victims just keep on coming…

    Action Fraud told me they weren’t going to investigate as there are “no leads” – seriously? I have more leads than crufts – but no one was interested … I guess too much like work!

    No one gives a …. I am resigned to it now but there will be many unfortunate people not ready for what’s inevitably coming …

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  4. The latest trustpilot feedback from an investor https://www.trustpilot.com/review/blackmorebonds.co.uk – a Mr. Taylor – reports on 30th Jan:-

    “Told on 23rd Jan 2020 that October 2019 interest would be paid by the end of January. Last night six days later (29th Jan 2020) receive email saying that they can’t pay the interest. Worried. ”

    Unless Mr. Taylor is just summarising, his comment appears to indicate that Blackmore cannot pay the interest and didn’t give a date when they could … i.e. “they cannot pay the interest…” – is that ever?

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  5. I read with much dismay the comments above. Blackmore are clearly going under and have not been truthful to investors. At the time of purchasing bonds we were assured of a capital guarantee scheme up to varying amounts on each bond provided by ION Insurance Group.Last year I was able to receive confirmation that such an insurance policy was in existence. I am puzzled that this is not being mentioned in the above comments. Surely investors should be contacting ION Insurance or whoever is guaranteeing their particular bond? Would love to have people’s comments on this? I am out of the country at present but will be researching this capital guarantee scheme more upon my return.

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  6. @Sheila to add to Stephen’s comment these insurers would appear to be based in Costa Rica. It’s hard to see how a bona fide insurer would agree to insure such a product following due diligence on it and the backgrounds of Mr Nunn and Mr McCreesh. The insurance is either heavily restricted so as to not cover the type of situation investors now find themselves in (which to the insurer would have been the most likely situation) or it had no intention of paying out anyway and can probably do so due to the jurisdictional issues in compelling it to pay. I suspect the insurance was another glossy veneer to the product.

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  7. Or the “veneer” was just an outright lie …. Blackmore Global, Nunn & McCreesh’s offshore unregulated fund dozens of pensions were transferred into earlier in the last decade, via several offshore QROPS (Kreston, Optimus Retirement Benefit Scheme No.1, and GFS in Hong Kong), made the claim in its brochure and offer documentation that its invesment managers were Meridan Capital Partners – a Spanish firm – but when Meridan were asked to confirm this they ’emphatically’ denied it.

    So Tweedledum & Tweedledee are not above a few porkie pies to get their hands on your money.

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  8. I would like put out this information for everyone to be aware of. Last year I contacted Lonsdale Insurance Brokers, the firm which set up the ION Insurance on behalf of Blackmore Bonds( BB ) Capital Guarantee Scheme to request confirmation that the policy/scheme existed. Lonsdale is part of Lloyds of London and they are regulated by the Financial Conduct Authority. The address of Lonsdale is: Lonsdale Insurance Brokers, 148 Leadenhall St., London EC3V 4QT Tel: (44) 0207-8160028. My contact there is Edmund Eastwood ( Edmund.Eastwood@lonsdaleib.com Mobile: (44) 07789-777130.
    He wrote to me regarding the Capital Guarantee Scheme for BB Inc. : Master Guarantee Bond No.: RH/LONS/20161011/0057 Lonsdale Ref: EE015/0016 ( I would assume that the EE in the latter reference is for Edmund Eastwood ) He confirmed that Lonsdale Insurance Brokers did indeed set up a Capital Guarantee Scheme with ION Insurance Corp. SA to protect bondholders for up to £ 75K in the event of insolvency and he suggested I contact ION for a copy of the Certificate of Insurance. Contact addresses for ION are : admin@ion.co.cr or underwriting@ion.co.cr. I do appreciate the comments on this post that because this company is based in Costa Rica there may be jurisdictional concerns, however, Lonsdale is based here, is part of Lloyds, and regulated by the FCA and has a responsibility to take out a “proper” Certificate of Insurance to protect bondholders. Or at least, one would hope so!!

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  9. @Sheila thanks for that information. Did ION provide the certificate or any additional documentation regarding the policy?

    I suspect the theme of Stephen’s comment may very well be applicable – the detail of the policy and when it obliges ION to pay out may not be quite what Blackmore would have had investors believe.

    The substantial returns required to maintain the issuance rate (putting aside for a moment the real-terms higher rate due to the commission paid to lead generators such as Surge) made the viability of the product and insuring it a pretty high stake proposal. Indeed, proceeding with an insurer in Costa Rica speaks to that. So there may be some real devil in the detail.

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  10. Fascinating. Protect Bondholders up to £75k in the event of insolvency – would that be £75k for each investor or £75k total to be shared out to all investors?

    If it was per investor, £75k is a large investment and I would speculate most investors are in it for less than that so in theory one could assume most investors could be covered for 100% of their investment … but that would mean ION paying out £25m-ish in the event of insolvency of BB plc and that is a huge amount for an insurance company to “guarantee” given the risky nature of Blackmore – and one assumes the insurers did thorough due diligence on!

    Why would they take on such a risk?

    When Blackmore Bond was created, there was a shed load of information on the dubious history of Nunn & McCreesh already in the public domain – I was creating some of it myself!

    I am still convinced there’s a “gotcha” in the detail … I would wager, £75k is it – max, to be shared by all investors – but Tweedledum & Tweedledee left out the “specifics” of the contract and worded it making out all investors were backed by a “guarantee”.

    As I have said before, those two are not above telling porky pies ….

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  11. OK. It’s not £75k maximum ….
    I have just read the Blackmore Bonds Information Memorandum and on page 19 it says:

    “… in the case of any shortfall or default in repaying Bondholders at the time redemption is due the Capital Protection Scheme will step in and ensure that investors are (in the absence of any fraud of the Company’s Directors and subject to the Directors complying with certain strategic limits on investment which serve to further diversify and de-risk the Company’s investment portfolio) repaid any shortfall in the amount they recover from the Company (in the event of its insolvency) for the full amount of their capital invested.”

    Fraud may be difficult to prove but the “… complying with certain strategic limits ….” could be their “get out of jail free card”.

    The document does not specify what those conditions are ….

    On the face of it though, investors would believe a) a good interest rate and b) risk free ….

    Given the document also shows where investors fit in the food chain (ie at the bottom after blood sucking administrators, bank loans etc) then you would think the insurers will have to have deep pockets to make good this commitment since the “shortfall” could be large.

    I guess we’ll have to wait and see ….

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