Administrators of collapsed mini-bond provider Blackmore Bond have warned that thousands of its investors will not receive any money despite being owed over £46m.
On 23 April, Geoffrey Bouchier and Benjamin Wiles from Duff & Phelps were appointed joint administrators of Blackmore Bond, after the firm collapsed following pressure from bondholders that had not received repayments from the end of October 2019.
Duff & Phelps said that when appointed as administrators, bondholders were owed £46.8m, excluding accrued interest up to that date.
Despite this, Duff & Phelps’ latest report to creditors warned that a huge number of investors will not receive any of their money back with no more than £1m likely to be recovered.
The report said that that out of Blackmore Bond’s 11 ongoing property development projects, eight of these have been sold to third-party lenders.
It said that the majority of third-party lenders have now enforced their security and administrators expect to recover no more than £1m through the sale of the property sites.
This is because the available equity in these properties is falling, due to the high levels of interest charged by these third-party lenders and the delays in getting the properties to market.
Furthermore, Duff & Phelps said that it has become aware that in many instances the level of works carried out by development contractors was of poor quality.
The report also revealed that Duff & Phelps’ costs have run up to £1.22m and legal costs to £100,993.
“The joint administrators are now of the view that any recoveries made from the property interests will be insufficient to enable a distribution to creditors after taking account of the costs of administration,” Duff & Phelps said in the report.
“Any distribution to creditors will therefore be dependent upon the outcome of the ongoing investigations and any recoveries that are made from those pursuits.”
The latest forecast of the money that can be recovered has dropped since June, when the previous progress report predicted that investors could recover up to £5m.