The latest update from the Blackmore Bond administrators reveals that investors may be facing total or near-total losses.
Potential gross recoveries have been revised from £5 million down to less than £1 million, due to the difficulty of selling properties / building sites as a forced seller during the pandemic, and the fact that Blackmore borrowed money from expensive short-term lenders whose security over the properties outranks the bondholders.
With the administrators' costs and legal costs already standing at over £1 million, which also stand ahead of Blackmore's ordinary investors in the queue, this means bondholders are facing total losses.
Administrators Duff and Phelps have released their initial report into collapsed property minibond scheme Blackmore.
Of £46 million raised from investors, director Patrick McCreesh has estimated in a Statement of Affairs that less than £5 million is likely to be realised to pay them back.
The collapse of Blackmore Bonds has once again laid bare the Financial Conduct Authority's institutional contempt for its objective of consumer protection.
Paul Carlier, an independent consultant most well known for blowing the whistle on dodgy FX dealings at Lloyds, contacted the FCA on March 2017 to warn them that Blackmore Bonds' high-risk investments were being missold by an unregulated introducer named Amyma.
After months of delayed and missing payments and failure to file legally-required accounts, Blackmore Bonds is finally to be taken out back and put out of investors' misery.
Administrators Duff and Phelps have been appointed by a security trustee (presumably Oak Fund Services (Guernsey) Limited), according to IFA trade rag Money Marketing. The news is little surprise as D&P were originally approached by Blackmore investors in January, seeking answers after months of delayed and missing interest payments.
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.
Troubled minibond provider Blackmore hit the news again over the Christmas period after missing a third consecutive interest payment and falling overdue with its annual accounts.
Rather than regurgitate the last two articles, we’ll examine the important issues in depth.
Q: Why has Blackmore stopped paying interest?
A: Blackmore has defaulted on three quarterly interest payments, starting in August. August’s was eventually paid a week late; Blackmore blamed a clerical error.
September and December’s payments remain unpaid. Blackmore has now blamed Brexit and delays in selling property.
Blackmore Bond is to delay its already-late October interest payment again, The Times reports.
Days before its October interest payment fell due, Blackmore announced that payment would be unilaterally delayed until November. That deadline has now also been missed.
Blackmore Bonds has delayed paying quarterly interest on its bonds for a second time.
Investors received an email from Blackmore director Patrick McCreesh saying that the payment due in two days' time would be delayed until 29th November.
Blackmore's last interest payment at the end of July was also delayed by a few weeks. In that case Blackmore blamed a "clerical error". This time around Blackmore has blamed "circumstances outside their control". At least they didn't try to blame Brexit.
The Times reports that Blackmore Bond is "set to" extend its accounting date again.
Blackmore Bond plc should have filed its December 2018 accounts by June 2019, but used the one-day-shortening loophole to legally delay filing accounts for three months. That three months expired on Friday 27th. The Times says that Blackmore will delay for another three months, which almost certainly means using the shortening loophole again.
Blackmore Bonds, which issues unregulated loan notes in its property development business, is a few days late in paying quarterly interest to some investors, according to reports in Money Marketing and the Telegraph.
According to Bond Review readers and The Telegraph, Blackmore's switchboard is jammed with worried investors and it is not answering emails.