Real Estate

Gavin Woodhouse investors to vote on settlement offer


Investors in an aborted Gavin Woodhouse care home project are to vote on whether the embattled entrepreneur’s former business partner is attempting to “buy them off at a pittance” via a new settlement offer.

The October vote will give investors the chance of accepting 11p for every pound they ploughed into a single off-plan development in Yorkshire, where the advertised care home never materialised.

MBI Walsden Care Ltd raised £5.8m from investors in 2014, but the cash has now vanished from the firm’s bank account. On Monday, Judge Mark Mullen ruled that Robin Forster, the sole director of the Woodhouse-owned company, could offer investors a vote on his proposal next month, rather than the company being taken immediately into administration.

Mullen said: “What [MBI Walsden investors] will wish to do is form a view if this relatively small return is something they want to accept at this stage or if they want a much more rigorous investigation that may lead to a higher return.

“It is for the creditors of this company to be given the ultimate say on if … this is an attempt to buy them off at a pittance”.

The site of the proposed Walsden care home on land off Deanroyd Rd near Todmorden



The site of the proposed Walsden care home on land off Deanroyd Rd near Todmorden. Photograph: Christopher Thomond/The Guardian

The ruling came after the June publication of an undercover investigation by the Guardian and ITV News, which posed questions about the business interests of Woodhouse, who raised more than £80m from private investors to build care homes and buy hotels, but whose firms have a multimillion-pound “black hole”.

A string of Woodhouse companies were then placed into administration during the summer, with the insolvency firm Duff & Phelps taking over the running of the companies.

MBI Walsden was spared this fate after its sole director Forster promised the high court he would not dissipate the firm’s assets.

On Monday Forster asked the court to delay Duff & Phelps taking over the running of MBI Walsden to allow investors to consider his company voluntary arrangement, an insolvency process that allows struggling companies to agree to a deal to alleviate their financial problems, assuming creditors holding at least 75% of the debt agree.

Through his counsel, Matthew Bradley, Forster described Duff & Phelps’ application to take control of MBI Walsden as “desperate” and that the insolvency firm’s evidence “over reached”.

Judge Mullen added: “It does appear to be clear that the MBI group of companies have, in an egregious manner, failed to safeguard client monies”.

“I think there is some force in [Duff & Phelps’] submissions as to the extent to which Mr Forster seeks to distance himself from the conduct of Mr Woodhouse. He essentially appears to admit in his narrative to a breach of fiduciary duty to the company in allowing Mr Woodhouse to operate the [company bank] account without reference to him.

“Nonetheless, it seems to me that this is a matter for the creditors of the companies”.

Forster says he was unaware how Woodhouse had been running shared businesses and that his own company, Qualia Care, is unconnected to Woodhouse.

Duff & Phelps’ applications to take four more Woodhouse firms into administration – Giant Hospitality, Campus House, Ideal Rooms and Ideal Management – were granted.

Woodhouse, who has denied any wrongdoing, wrote to the court to say he neither consented to or opposed the applications.



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