Darragh Connell considers the recent High Court decision, Re BBH Property 1 Ltd & Ors  EWHC 2584. Roth J appointed the Official Receiver as the provisional liquidator of 13 separate companies where it was likely they would be wound up in the public interest.
The companies in question were involved in one of two projects. The projects were crowdfunded by investors sourced through introducer companies. In doing so, prospective investors were provided with various representations. Amongst the most notable representations was the statement made by BBH Property 1 Ltd on the front page of its investment brochure characterising the UK project as “a spectacular investment secured by a spectacular asset”.
As it transpired, the purported representations were said to false. Security was not put in place and the investors’ monies were dissipated without the companies acquiring the properties. It appears that the investors may receive little return on the funds invested.
The Secretary of State for Business, Energy and Industrial Strategy presented petitions to wind up the 13 companies pursuant to s.124A of the Insolvency Act 1986 on the basis that it was expedient in the public interest to do so. In the mean time the Court exercised its jurisdiction under s.135 of the Act to appoint a provisional liquidator at any time after presentation of a winding-up petition but before the making of a winding-up order.
The article is reproduced here. This material was first published by Sweet & Maxwell, Provisional Liquidation in the Public Interest and the Perils of Crowdfunding “a spectacular investment” (2017) 30 Insolvency Intelligence, Issue 8 at p.129 and is reproduced by agreement with the Publishers.