High Street Group loses rooftop showdown with creditor, subsidiary put into administration

A High Street Group subsidiary has been put into administration following a battle with a creditor in the High Court on 30 September. (Hat tip to an anonymous reader who pointed me to the case report.)

For clarity, I will emphasise that neither High Street Commercial Finance Limited, which issues the loans covered in my 2018 review, nor the holding company High Street Grp Limited are in administration. The company which is in administration, High Street Rooftop Holdings Limited, is another subsidiary of High Street Grp.

The story goes as follows: Strategic Advantage SPC is a company in the Cayman Islands which invests on behalf of “Korean blue-chip investors”.

Strategic Advantage employed Hypa Asset Management Limited and its two directors Simon Welsh and Marc Hounsell. Through Hypa, Strategic Advantage invested £26 million into rooftop projects run by High Street Rooftop Holdings in 2018. High Street Rooftop promised an interest rate of 16.5% in return, with the loans to be repaid in 18 months, being December 2019 and January 2020.

January came and went without High Street Rooftop paying the money back.

High Street Rooftop promised to repay according to a specified schedule and undertook to provide audited and group accounts by March 2020. Neither of these conditions were met.

(As regular readers will know, High Street Group has failed to file legally-required accounts not just for High Street Rooftop but the parent company High Street Grp and High Street Commercial Finance. The latter two companies are a whole year overdue.)

Strategic Advantage had had enough and applied to put High Street Rooftop into administration. High Street Rooftop claimed that the payment dates had been varied such that it wasn’t overdue, and the original loan agreement could no longer be enforced.

High Street Group owner Gary Forrest claimed in court that a few weeks after borrowing the money, in July 2018, “it became clear that the rooftop developments would not proceed to completion quickly enough for the Company to meet its repayment obligation due to delays in obtaining planning permission“.

High Street Group owner Gary Forrest

In Forrest’s version, he proposed to Hounsell that £20 million of Strategic Advantage’s money should be redeployed to other High Street Group projects, known as the PRS Developments, which were due to complete on various dates between October 2020 and February 2023. Forrest claimed that Hounsell agreed – and in doing so accepted that Strategic Advantage would have to wait until the projects completed for its money, voiding the original early 2020 repayment date.

In support of his version of events, Forrest cites an exchange of text messages which no longer exists.

Mr Forrest says that he believes this exchange with Mr Hounsell took place over text message but he no longer has access to his texts.

In the words of the judge, “Mr Hounsell’s account of his dealings with Mr Forrest is very different.” Hounsell denies ever agreeing to allow Strategic Advantage’s money to be moved to other HSG projects.

Among the evidence cited by Hounsell is:

  • a letter written by Forrest in July 2018 confirming the originally agreed repayment dates and containing no reference to using the money for other HSG projects with considerably longer timescales
  • an email exchange in August 2018 in which Forrest agreed to meet with a Strategic Advantage investor, to present the merits of the PRS Developments as a new project – which Hounsell submits made no sense if Strategic Advantage knew that their money had already been redeployed to PRS

High Street Rooftop argued that Forrest and Hounsell should be cross-examined and that other witnesses should be called to determine who was telling the truth. Judge Andrew Sutcliffe QC rejected this argument on the basis that HSG and Strategic Advantage had agreed that the loan agreement should only be varied in writing, and there was no evidence in writing to support High Street Rooftop’s contention that Strategic Advantage had agreed to wait longer for its money, among other more technical arguments.

The judge therefore rejected High Street Rooftop’s argument that Strategic Advantage could not enforce its loans, even though High Street Rooftop had not only failed to meet the original repayment dates but a renegotiated payment schedule and an agreement to provide audited accounts.

High Street Rooftop also argued that it should not be put into administration on the grounds that the purpose of an administration could not be fulfilled.

This argument was essentially a legalistic version of that old chestnut ‘everything will be fine as long as you don’t ask for the money back’.

[High Street Rooftop] state that the Company’s assets (namely the funding received under the [Strategic Advantage] facility) have been invested in the PRS Developments which will not realise any genuine commercial value until such time as those developments are completed. They say that the likelihood of the PRS Developments being completed on time and in a manner that achieves any realisation for the Company will be significantly impacted if an administration order is made.

High Street Rooftop stated that enforcing the loan and putting them into administration will not only prevent them seeing the PRS Developments through to completion, but impact the wider High Street Group as well.

They also say that the Company has spoken to BLME and Topland Jupiter Ltd (Topland), the secured creditors of Group companies carrying out two of the PRS Developments, namely, Olympius Developments Ltd (Olympius) and Rodus Developments Ltd (Rodus), who have indicated that if an administration order is made in respect of the Company, they will exercise their enforcement rights in respect of their security and appoint receivers over the PRS Developments managed by those companies, being Hadrian’s Tower in Newcastle and Middlewood Plaza in Salford.

The aspiring administrators, for their part, explained to the court why putting High Street Rooftop into administration should proceed.

Following the granting of an administration order, the Administrators would be in a position to investigate the ultimate destination/flow of the funds borrowed by High Street Rooftop and in turn lent to group companies. In order to maximise the position for creditors, the Administrators would seek to take steps to recover the funds from across the group on the basis these represent inter-company debtor balances.

The high-pitched sound you can hear is the squeaking of bums belonging to other High Street Group investors.

As described above, at the time of the hearing High Street Rooftop had still failed to file accounts for December 2018 or meet its promise to provide Strategic Advantage with audited group accounts.

Instead, HSG Finance Director Joanne Bell made a witness statement and provided various documents:

  • a letter from HSG’s “external accountants” Stokoe Rodger LLP (Ms Bell stated that PwC, who are supposedly compiling HSG’s long-awaited statutory accounts, could not provide anything to the court for “reasons connected with workload and Covid-19” (at least she didn’t blame Brexit)
  • draft 2019 statutory accounts and 2020 management accounts for High Street Rooftop
  • management accounts for Rodus, one of the PRS projects
  • a cashflow analysis and up to date values for the PRS developments
  • a financial forecast for High Street Rooftop

High Street Rooftop claimed that these documents showed it to be solvent and that Strategic Advantage would get its money back.

Strategic Advantage responded that

  • High Street Rooftop had failed to take into account the interest it owed
  • “The further evidence raises more questions than it answers” – specifically, by including £9.7 million of “prepayments” and causing a liability for “inter-company payables” to disappear, the 2020 balance sheet had “been inflated” from £25k to £9.8 million “without any satisfactory explanation as to how this has happened”.

The judge accepted Strategic Advantage’s first point and stated that “On the basis that very substantial interest liabilities have already accrued and will continue to accrue and it is not explained how the Company could meet this obligation to pay interest… the inevitable concusion is that High Street Rooftop is already insolvent or likely to become insolvent”.

The judge also agreed that “it is regrettable that no explanation has been provided” for the alleged balance sheet inflation, and the failure of High Street Rooftop to provide an adequate explanation “raises further questions as to the reliability of [High Street Rooftop’s] financial information”.

High Street Rooftop’s argument that it shouldn’t be put into administration because Strategic Advantage was going to get its money back eventually was therefore rejected.

Dodge this.

High Street Rooftop’s last resort was to get the onion out.

Mr Brown’s evidence is that the making of an administration order over the
Company could have a hugely detrimental impact across the Group, with the
potential loss of hundreds of jobs and the cessation of building of thousands of
new homes as well as hotels and commercial properties. […] Mr Forrest says that an insolvency event for one of the companies in the Group is likely to have wide ranging and serious implications for the rest of the Group which could be catastrophic for the individuals concerned, with some 300 full-time employees and 1,000 subcontractors being affected.

The judge confirmed he was “acutely conscious” of these potential consequences, but that they did not override Strategic Advantage’s right to enforce its debt.

In my judgment, a return to secured creditors is more likely to be achieved if licensed insolvency practitioners (rather than the existing management) are in control of the Company who can seek to ascertain full information regarding the financial position of the Company and take informed commercial decisions about safeguarding the Company’s assets and achieving a return to secured creditors.

Strategic Advantage’s application to put High Street Rooftop into administration was therefore granted.

What effect this has on the wider High Street Group, as feared by Gary Forrest, and the investors in its loan notes, remains to be seen.

30 thoughts on “High Street Group loses rooftop showdown with creditor, subsidiary put into administration

  1. Unfortunately this is a ponzi scheme paying brokers 25 to 30 per cent upfront and paying peoples interest from new money. They can’t pay people therefore looking to illegally extend contracts on projects blaming covid.

    Like

  2. he only way that high street group adjust its attitude and snobness, is for the serious crime investigation agency to step in, bans all its employee from leaving the country. cancel all their passports, freeze their assets(UK & overseas) pending full investigation.

    Allowing high street group to go into administration, is the perfect way for all its directors to play the system and get away. Administrators are only interested in justifying their expenses by claiming a huge slice of any company assets ( legal fees etc) and telling investor caput we have nil money left for you , hahaha

    Let’s also not forget that the introducers should also be included, as they have lied to the public by misleading them to invest using sophisticated means

    I know there had been details complained raised with FCA, which FCA simply told the complaints to go away we do not deal with unregulated investment, as well as financial ombusmant

    It is a hard evidence that the UK is a stateless country, when it comes to big boys.

    I bet if one failed pay council tax for 3 – 6 months, you’ll either end up in jail in an express lane or a hefty fine and CC records, which would be taken against by the very institutions you paid taxes for !!!!!!!

    what a shame !

    Like

  3. Oh my God , this is awful , is this company worth lot of meny, surely their asset could cover investors money

    so sad to see that ponzi scheme are common skills in our economy

    Like

  4. I have been deceived countless times, by Gary O’Hara, Chris Duncan, Paul Buzzeo, Gary Forrest. My investment matured on 22nd January 2020 and the maturity date continues to be indefinitely be deferred. They talk about payment plan but the payment plan is never organised.

    I invested in High Street GRP Limited the group company.

    I do not know whether I should pursue a lawsuit but I fear that they will file for insolvency thus losing my hefty court fees.

    I do not know what to do, I am sooo hopeless.

    Like

  5. Hi Mr Amin

    I have invested well over 50k and have not been paid yet, if you don’t mind me asking how much did you invest , it doesn’t have to be the exact figure.

    have you had any advise on how to pursue this!!!

    Like

  6. Hi Scott,

    I have invested £80K and have not yet been paid a single penny.

    The county court money claim service but I am afraid that the company High Street GRP Limited will default thus further losing my court fees of approximately £7 k.

    Like

  7. Hi Amin

    Thank you for sharing, I think high street group should consider to ask for Government help , if it collapses it will hurt so many people & cause mayhem to all other companies

    Like

  8. Thank you for sharing, I think high street group should consider to ask for Government help , if it collapses it will hurt so many people & cause mayhem to all other companies

    I sympathise with anyone who loses their job, especially in a recession, but the loss of 300 jobs won’t cause a ripple even in High Street Group’s local area, let alone the wider UK.

    The Government is not going to bail out an unregulated investment scheme which offered up to 22%pa returns to investors.

    As the collapse of High Street Rooftop shows, if an unregulated investment scheme owes you money and hasn’t paid it back on time, your options boil down to either 1) enforce your debt in court (risking throwing good money after bad) or 2) write the money off and treating any recovery as a bonus. Option 3, wait and cross your fingers, is just a more stressful version of either 1 or 2.

    Strategic Advantage played the wait-and-cross-your-fingers game for a while, and then when High Street Rooftop defaulted on the renegotiated payment schedule, they had to fight High Street Rooftop in the High Court – draining further funds from what was left, to pay High Street Rooftop’s legal costs – to enforce a debt on which High Street Rooftop had defaulted not once but twice (original maturity date, then renegotiated payment schedule).

    Like

  9. Hi Brev and Scott,

    Scott what are you going to do? Are you still going to wait or are you going to take legal action? Do you want to connect on facebook? if so, please provide your name so we can message on this same subject and support each other.

    Brev, you mention Strategic Advantage played the wait and cross your fingers game for a while, but I too have been waiting since January 2020. High Street GRP Limited failed to pay me on maturity date then renegotiated payment schedule was agreed but gain failed to commitment and did not carry pay me as per payment schedule. Thus, I have no option other than taking legal action as they have also defaulted twice (Original Maturity and the Renegotiated payment schedule).

    Like

  10. Hi Mr Amin,

    I have requested help from local MP to see Government Agencies into this , rather than going to court, hopefully we can , Brev has explained that we will be just burning our money if we take them to court

    but I do believe I do have the advantage of element of suprise

    Brev any advise !!

    Like

  11. Hi Scott,

    I have contacted FCA, Property Ombudsman, I have contacted the companies house all of which have declined to help.

    I have also contacted The Insolvency Service but they have not got back to me even though I contacted them a 3 weeks ago.

    Only you have an advantage of surprise?

    Like

  12. Hi Amin,

    Same with me, I have on another case with West holding investment provided evidence to FCA and financial Ombudsman, that the company that introduce me to the investment used misleading information that West holding investment is FCA regulated, they all declined to help or advise what to do next.

    Like

  13. Hi Scott,

    I assume you raised a complaint with West Holding Investment then after 8 weeks passed you went to FCA/Financial Ombudsman?

    Do you want to connect on Facebook?

    Like

  14. Hi Brev,

    Would high street group be subjected to the Serious Fraud Office investigation . if investors report this to them, the aim is impose criminal charges on all the directors & introducers who have knowingly lied to us , deceived us.

    Like

  15. [Scot:] Brev has explained that we will be just burning our money if we take them to court

    For avoidance of doubt, I haven’t said this. I have no insight into HSG’s internal finances or the likelihood of any repayment to creditors if creditors take HSG to court.

    There is however an inherent risk that paying court fees to take a delinquent debtor to court ends up being throwing good money after bad, if you never recover the money or the fees.

    Would high street group be subjected to the Serious Fraud Office investigation . if investors report this to them, the aim is impose criminal charges on all the directors & introducers who have knowingly lied to us , deceived us.

    You’d need some evidence of fraud first, otherwise the SFO is unlikely to take action. Defaulting on debts is not fraud. I appreciate that from the perspective of upset and angry investors in HSG, that sounds like defending them. If so, try to see it from my perspective. HSG has made multiple legal threats against me and I’m not going to be drawn into discussing unsubstantiated allegations.

    Like

  16. Hi Brev

    I wish I had found your site before investing, I appreciate your help & dedication in educating me about the issues surrounding unregulated investments.

    Thank you

    Like

  17. Hi Brev

    Are you insinuating that HSG are going to go pop?

    If not, what is the purpose of this article if nothing but to scaremonger?

    Do you get anything from frightening people?

    Like

  18. Are you insinuating that HSG are going to go pop?

    Nope. I have stated clearly that I have no insight into the finances of the wider HSG group, partly due to their failure to file legally-required accounts for over a year.

    Are you?

    If not, what is the purpose of this article if nothing but to scaremonger?

    To report on the outcome of a recent court case involving an unregulated investment scheme.

    Do you get anything from frightening people?

    Nope. Do you gain anything from telling people that when subsidiaries go into administration after a protracted and ultimately pointless attempt to weasel out of honoring the original repayment date on their loans, and the administrators indicate they will seek recoveries from the wider group, it’s all tickety-boo and not to worry?

    And any further stealing of other people’s names gets your posts automatically binned.

    Like

  19. Not sure who you are ,defending HSG , I have investments of very large amount, all have defaulted without a single exception. not a single payment had been met.

    stop sending your investors extension letter and pay up, only then we can have trust you.

    Every investor is worried now from the news above , unfortunately HSG did not do much, all its broker ( introducers) still to this date promoting HSG investments, where is the money going ?, paying for your & HSG directors lifestyle.

    Investors are not only scared, those I spoke to have had personal problems causing mayhem in their family because of this.

    Until HSG pays its due, I won’t let you off the hock

    Like

  20. HSG do not have any money all been used to pay Hunter Jones and Direct Property and other agents commissions. Can only pay you if new money comes in. Definition=Ponzi

    Like

  21. Hello anonymous,

    In that case investors should consider legal action against the like of Hunter Jones and Direct Property , they must have known

    Like

  22. [Edited: Ok, I’ve read this comment from you enough times. Any further comments that add nothing except victim-blaming will be binned. And turn your caps lock off. -Brev]

    Like

  23. Graham

    And you’re a wise man who never made a single mistake in his life , Mr outstanding , Brev has done his bit.

    Where are our institutions? what are they doing ? FCA, FCSC , HMRC, COMPANY HOUSE, POLICE , SERIOUS FRAUD INVESTIGATION

    Rather than landing the blame on all of us ( investors) , do you not agree that we ought to be protected by the very institutions we all pay taxes for , HSG got away with nil account return for ages ( HMRC, COMPANY HOUSE) silent,

    Corruption is the word you did not dare to list, because you damn know this what is about

    Like

  24. Amin & Scott

    I was in a very similar situation as you currently are a few months ago – 6 months default on payment, further delays, payment programmes, share options et etc

    I now have all my money back and am out. How did I achieve this?

    Constant daily phone calls to O’Hara, Buzzeo etc etc. Take meticulous notes of your phone calls as they all eventually contradict themselves because it is one lie after another. Demand to know exactly where your money is. They don’t know but easiest way to catch them out. Once they know you know they are lying tell the, you are contacting the local press and your MP. Anybody who might stick their nose into their business etc etc

    Make yourself such a bloody nuisance and threat that they pay you to get you off their back

    It is a world of who makes the most noise get heard. It will become very unpleasant for you but worked for me in the end

    Good luck

    Like

  25. Dear Dooksman,

    I have already taken that approach but unfortunately it is not working for me.

    Maybe your invested amount was not as large as 100k in total inclusive of interest?

    Kind regards,

    Amin

    Like

  26. Dear Dookman,

    Approximately when did they pay you, like which month also was it a full payment or was it as a payment plan?

    Kind regards

    Amin

    Like

  27. If HSG offers a payment plan then do you recommend we take that offer or make them stick to the lump sum?

    The lump sum may never come whereas there may be a chance of them making a regular payment via a payment plan.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s