big property portfolio

Manchester Property Investment Company

In March 2012 we were approached by the principal of a Manchester Property Investment/Property Development company that was in serious financial difficulty with three of their twelve banks, being HSBC, RBS and Lloyds Bank.
The situation with HSBC was that the Bank was on the verge of appointing Edmund Symmons as LPA Receivers over the HSBC portfolio, which had debts of just over £6,000,000.  While negotiations were under way with HSBC we were tasked to concurrently assist with a much smaller RBS portfolio, where the debt stood at approximately £1,300,000.  This was a relatively simple matter to solve, as we arranged to sell two properties and restructure the debt with RBS, for the balance of the portfolio, at an interest rate and a repayment term, that would allow 75% of the gross rent to pay off the balance of the loan over fifteen years.
    
Returning to the HSBC portion of the portfolio, after intensive and drawn out negotiations, it was agreed with HSBC that £2m of the debt would be written off and that our client could either re-mortgage or sell the portfolio, to pay the £4m to HSBC Bank. This task took vastly longer than was expected, but was completed by mid 2014, some two years after we commenced work.
    
When we were retained in 2012 our client had already had his portfolio with Lloyds Bank placed into LPA Receivership, which originally had been valued at over £20,000,000. Our client advised GAG that he intended to commence legal action against Lloyds Bank, as well as the LPA Receiver, a course of action that we at GAG advised strongly against, as we felt that our client did not have the financial resources to have any chance of success. Unfortunately for our client, our advice was ignored, so GAG concentrated on the HSBC and RBS matters.
 
In early 2014 our client came to us in a very worried state, as it transpired that our client’s solicitor had advised the legal firm representing Lloyds Bank that our client did not have the funds to continue with the legal action. At this time Lloyds Bank solicitors had already obtained a Court Order for our client to pay £240,000 in legal costs to Lloyds Bank solicitors. On top of this there was a shortfall owing to Lloyds Bank from the forced sale of the properties by the LPA Receiver, amounting to an eye watering £7,500,000 approximately. The matter was further complicated by the fact that all of the portfolios were in one single company and had the company been the subject of a Winding Up Petition or Administration, then our client would have lost his whole business, that he had built up over the previous thirty years.
 
At this stage GAG was facing an incredibly difficult negotiation if we were not successful with Lloyds Bank, then all of our hard work on the HSBC and RBS portfolios would be in vain. It was immediately clear that negotiations needed to be conducted with a senior executive within Lloyds and it took a great deal of correspondence to achieve this. Finally we were contacted by a gentleman who held the title of Managing Director Property, for Lloyds Bank. After numerous discussions and a meeting in London, it was agreed that our client would pay the sum of £15,000, as a gesture, and that Lloyds Bank would write off the full amount of the £7.5m shortfall and £225,000 of the legal costs that had been awarded.
 
When this agreement was signed, by way of a legal Settlement Agreement, our client not only got his company back, but he got his life back as well.
 
 
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Global Advisory Group are specialists in Business Turnaround
2nd Floor, Victoria House, Victoria Road
Hale
Cheshire
WA15 9AF
United Kingdom
+44 (0)161-928-3403
 

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