The administrators of Signature Living Hotel, the parent company of the Signature Capital investment scheme, have released their initial report.
How much the company owes to investors is difficult to pin down. Signature Capital consists of a dizzying web of 106 currently active companies controlled by Lawrence Kenwright. Although it was these subsidiaries that borrowed money from investors, a guarantee was typically given by Signature Living Hotel Ltd as the parent company.
As covered in May, Signature made an unsuccessful attempt to wriggle out of this guarantee in the High Court, a few months before going into administration. In that case the investor had loaned money to Signature Heritage (Belfast) Limited with a guarantee by Signature Living Hotel.
The administrators have totted up a total of £111 million in liabilities, the majority of which is debt owed to intercompany and related parties. It includes a £10 million provision for liabilities to retail investors, but the administrators expect “the final figure will be much higher”.
In addition to soliciting investment from retail investors, Signature borrowed money from a host of bridging lenders and other commercial lenders, secured on its freehold properties.
Even a homeless shelter opened by Signature to great fanfare, including a half-hour video documentary produced by the Grauniad, was mortgaged – to bridging lender Stoneygate. The homeless charity has found alternative premises and is said to be vacating the Signature property shortly.
The administrators say that after paying off the secured creditors,
it is anticipated that there will not be sufficient realisations to enable a dividend to unsecured creditors… however this remains uncertain
The collapse of the Signature empire probably puts the kibosh on Lawrence Kenright’s ambitions to be Mayor of Liverpool, though given the current state of UK politics, who knows.
I reviewed Signature Capital’s investments in May 2019, noting that despite claims on their website to provide “fantastic returns in a secure environment” and “a safe place [for money]”, their investments paying up to 16% per year were inherently high risk.
Despite the factual nature of my review, Signature Capital spent investors’ money on paying the law firm DWF to threaten me with a defamation claim in the weeks after I published my review. Hilariously, their complaint included an attempt to claim that Signature did not offer investments paying 16% per year, despite this coming from Signature’s own marketing material.
They claimed that my review was misleading as I had failed to regurgitate Signature Capital marketing spiel about their investments being guaranteed by Signature Living Hotel (the same Signature Living Hotel that is now in administration). According to Signature’s lawyers, I had “failed to understand or explain the nature of the guarantee”. As Signature Living Hotel is now in administration, I think we can now take it as read that I did.
Only a few days after my review was published, and while their lawyers were fruitlessly SLAPPing at me, the BBC first reported on Signature Capital’s problems with repaying investors.
Signature Capital’s problems appear to have started before then, however. On February 2019 the website signaturecapital-scam.co.uk was registered, which made various allegations against Signature Capital.
In May 2019 Signature Capital took over the signaturecapital-scam.co.uk domain, and replaced it with a website which directed investors to “Avoid Being Scammed and Invest With Signature Capital”. Subsequently the website was blanked. How Signature acquired the domain from the original aggrieved owners, e.g. by paying them off or using legal proceedings, is not known.
Signature Capital’s repurposing of the signaturecapital-scam.co.uk domain was not their only financial promotion to investors. Both Signature Capital’s own website and owner Lawrence Kenright’s personal blog promoted Signature’s investments.
Let’s see how we compare to other investment opportunities in the UK…
Signature Investments – 11% or 8% ROI
Current accounts – 3-5%
Property – 3-6%
Retail bonds – 5-7%
[…]
As you can see from the investment table above, Signature Investments can provide an excellent return on your investment. You only have to review our proven track record to realise you can embark on a rewarding investment with a successful, passionate hospitality company.
Neither Signature Capital nor Lawrence Kenwright are authorised by the Financial Conduct Authority. Distributing financial promotions without authorisation in the UK is a criminal offence punishable by a prison sentence and a fine.
Despite issuing financial promotions to the public via the Internet for years, resulting in what seems certain to be at least tens of millions of losses, no action has been taken by the FCA against Signature Capital that is in the public domain.
Addendum
Signature’s hotel and restaurant business appears to be partially insulated so far from the collapse of the Signature Capital investment scheme. The Liverpool Echo reports that several Signature venues are preparing to reopen after being closed due to lockdown.
Despite these problems, a number of the group’s most popular venues – including the Shankly Hotel and Alma de Cuba bar in Liverpool – are preparing to open, with administrators Duff and Phelps confirming in an update that the trading operation of these venues does not fall under the scope of the administration.
Kenwright stated “while certain parts of the group may be in administration, Signature Living will continue to operate” and “it is worth noting that the value of our overall ‘bricks and mortar’ assets significantly outweighed our liabilities pre Covid”. How much it is worth is open to question given that Signature’s failure to pay investors on time began in early 2019, when Covid was a twinkle in a pangolin’s eye.