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.