5 takeaways from Blackmore Bond administrators’ progress report
The administrators of collapsed mini-bond provider Blackmore Bond have published their progress report, detailing how much investors may recoup and the previous financial state of the company.
On 23 April Geoffrey Bouchier and Benjamin Wiles from Duff & Phelps were appointed joint administrators of Blackmore Bond, which collapsed following pressure from bondholders that had not received repayments from the end of October 2019.
Read more: FCA bans marketing of mini-bonds ahead of ISA season
- Investors may lose out on millions
Blackmore Bond owes investors over £46m from 11 property development projects.
However, the administrators have warned that investors may only be able to recover £5m because the property portfolio is now worth much less than the amount invested in.
- Blackmore Bond had less than £1k in the bank when it collapsed
Blackmore Bond had cash in the bank of less than £1,000 when it entered into administration.
The mini-bond provider failed to file its December 2018 accounts by the December 2019 statutory deadline.
The joint administrators hold draft financial accounts for the Blackmore Bond for the year ending 31 December 2018 which show the company making a loss of c.£8m.
This follows on from the loss of £7.6m reported from the firm and its subsidiaries for the 18-month period ending 31 December 2017.
The joint administrators said it understands that Grant Thornton resigned from its position as auditors of the company in February 2019.
- Blackmore Bond used the same marketing agency as London Capital & Finance
The administrator said that Blackmore Bond used online marketing company Surge to source new investor funds.
This was the same agency which represented mini-bond issuer London Capital & Finance (LCF), which notoriously collapsed in January 2019, owing bondholders around £237m when it entered into administration.
Read more: London Capital & Finance investigation postponed
According to the administrators the directors of Blackmore Bond said the failure of LCF made it increasingly difficult for the firm attract new investment due to negative press and resulted in the FCA making enquiries directly of the company in relation to its business operations.
- Amicus Finance
In December 2018 Amicus Finance, made up of Amicus Property Finance and Amicus Commercial Mortgages, entered into administration.
According to the Registrar of Companies, Blackmore Bond has outstanding charges in respect of security granted to Amicus Finance.
However, the joint administrators said they presently understand that the amounts due to Amicus Finance have been satisfied.
- Administration costs
The administration racks up a range of fees.
The joint administrators estimate the expenses to come to £45,345 excluding legal costs.
Total time costs incurred to 6 June 2020 at standard hourly rates make up £534,540 representing 1,243 hours at an average hourly rate of £430 per hour.
And total pre-administration costs incurred by Duff & Phelps total £34,785 for time costs and disbursements and solicitors’ fees and disbursements.
