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Dylan Harvey investors may get some cash back

Simon Binns on how a collapsed property firm is to be liquidated

Written by . Published on August 2nd 2010.


Dylan Harvey investors may get some cash back

Investors who paid deposits to collapsed property broker Dylan Harvey Residential Ltd may get some money back, according to the firm’s administrators.

The firm went into administration owing around £100m, including £6.5m in deposits from investors. Claims from 390 creditors will now be passed over to liquidators.

A new report by the Manchester office of CLB Coopers said it planned to put DHR into liquidation, which would give extra powers to chase down almost £3m of “potentially reversible” claims, which include intercompany loans, the sale of three properties and a £1.6m dividend paid to the directors shortly before its failure.

A payment for £253,000 made between another two companies owned by DHR director Toby Whittaker may also be open to a charge of misfeasance, it said.

The report said that the opportunities offered to investors by the company, which acted as a broker on a number of residential schemes in Manchester, several of which were never built, were still under consideration of The Financial Services Authority to see if they were “proper”.

The firm went into administration owing around £100m, including £6.5m in deposits from investors. Claims from 390 creditors will now be passed over to liquidators.

“Liquidators will have greater powers of investigation and will not suffer the time constraints imposed by an administration,” said the report.

“Subject to realisations obtained by the outlined actions, the subsequently appointed liquidators will be in a position to make a distribution to unsecured creditors.”

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John HarrisJuly 29th 2010.

An insolvency lawyer writes....

This is a real jam tomorrow story I'm afraid.

If there were anything in the claims they talk about then the administrators would be taking the appointment as liquidators themselves. Putting someone else in just adds another layer of cost to chip away at any recoveries they do make.

And administrators have more or less the same investigatory powers as liquidators anyway. The time constraint point is valid but there are other ways of addressing it.

It sounds like they have trousered their fee, decided the other "claims" are not likely enough for it to be worth their while pursuing, and are bowing out.

Creditors of this company should not hold their breath.

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