This blog was established to help get to the bottom of how the Collins & Bone Partnership reached the very sad situation it is now in, with its partner Liam James Collins having a bankruptcy hearing on 25th January (postponed)15th March 2012 (ditto), and finally bankrupted on 9th May 2012 (case # NEWC 1517 of 2011 BKT 3472187, Newcastle County Court, The Law Courts, The Quayside, Newcastle-upon-Tyne, NE1 3LA), and David Bone Jnr declared bankrupt on 31st May (case no 100 of 2012 Wigan County Court). The partnership used the following addresses:

25 Shelton Street, Covent Garden, London, WC2 H9HW, UK

Eastern Villa, Station Rd. North, Forest Hall, Newcastle Upon Tyne, NE12 9AE (owned by Liam Collin's parents, and now up for sale)

There are 3 specific goals of this blog:

• To find out what happened to the 1m+ GBP monies that C&B raised via PNs in late 2009, 2010 & 2011. I am excluding PNs issued to ex-CBS investors, but that said, this blog will be of interest to ex-CBS investors, and there is information that needs to be obtained from this set of investors wrt when PNs were issued to them, and their duration.

• To determine what, if any, criminal charges should be brought against the partners.

• To warn other investors off doing any business with the partners, their equally inept/unscrupulous extended family members, and supportive cohorts.

When you look at the PNs, there are no specific statements on the documents that specify how the monies were to be used - how you believed they were to be used is based on whatever e-mail/phone call foreplay you had beforehand with Liam Collins. That is why it is so important that the following information is collated for this category of C&B investors on an individual basis:

1) What did you believe you were investing in, and what was your basis for believing this?
2) What investment risks were you informed of?
3) What was your understanding of the purpose to which PN monies could be put?
4) What brochures and documents were you furnished with as prt of your due diligence?
5) What due diligence did you do?
This blog is being operated completely separate to Sally & Jasmine's blog (, although we share the common goal of getting to the bottom of this mess in a professional manner. If you don't want to post anything on the blog in person, you can send an e-mail to me at - information conveyed in any such e-mails will only be posted on the blog on your behalf after any editting/your specific consent.

Ewart (The Editor)

Tuesday, 14 February 2012

IVA investigation

In the article dated Monday, 13 February 2012 on, the statement is made that:

"If anybody wishes to advise us differently, we would love to hear from them, but, Ewart Tempest,who has made the latest blog, investigated this on our behalf last week and got the same result as we did, it is not possible."

This is an overstatement of what I did, as per below. The sum total of my efforts can best best described as understanding:
  • the degrees of flexibility in IVAs.
  • whether there were IVA practitioners who would be prepared to handle an IVA without demanding 10k-20k GBP up-front. This is what the IVA practitioners that Liam Collins/David Bone had so far approached were demanding ... monies they don't have.
It is not possible, or realistic, for anyone to find an IVA to act on C&Bs behalf without going in armed with all the facts e.g. rental cashflows, property maintenance costs, business overhead costs, mortgage costs (I don't even know what interest rates C&B are being charged on their mortgages, and whether any attempt has been made to renegotiate lower rates), number of debtors (200 now being mentioned), understanding "the situation we have", etc.  Suffice to say, I don't have this information.

The only visibility that C&B investors had been given of any attempt by the partners to enter IVA was the following statement in the e-mail sent to all investors by Liam Collins on 7/1/2012:

"We have been in contact with 5 different top insolvency firms and they have all said they will not take the case on to help us go into an IVA which would protect all of us from the damage of bankruptcy and thereby protecting your investment. Their reasons were all the same that they make their money by getting a percentage of the monthly repayment plan and if we cannot offer a guaranteed repayment plan monthly how can they make their cash?"

This did not strike me as a particularly rigorous or a determined attempt to enter IVA, and I personally believe an IVA style approach to be the best way to go to secure remaining value for shareholders. There appears to be more flexibility in IVAs than simply either a fixed monthly payment for 5-7 years, or one lump sum payments and that's it. Which is just as well, because the following is the situation:
  • Max monthly payment would be around £0-£500 per month at the moment it would be 0. Problem with IVA is getting 75% to agree to a payment plan of £1-2 per month.
[ewart]: Note that the 75% refers to the percentage of debtors who vote, not the percentage of debtors. Given the percentage of investors who either signed, or were prepared to sign, the 5-year plan PNs, achieving this should not be an issue. There is no point in such measly monthly payments, however. Unless there is a pick-up in rental income - the only worth in these assets is in any appreciation over the duration of the IVA term.
  • If interest rates move even .5% the portfolio will be cash negative.
[ewart]: all properties are mortgaged to the hilt.
  • In an e-mail dated January 17th, Liam Collins stated:
"if I am allowed to find a legal way of choosing who I pay back I would pick the following order

1.       Family members who never actually invested and never received an interest they simple gave us money to help us out in troubled times
2.       Investors who have invested in me and David personally by way of lending us money in early 2006 and 2007
3.       Investors who have invested by way of PN post CBS i.e. yourself
4.       Investors who investment we lifted out of CBS
5.       Other non  investor creditors like suppliers"

It is highly unlikely that in an IVA, and perhaps not even in a bankruptcy, setting debtors in category (4) above could be shaken off/omitted - more than 50% of the debt that C&B now has was incurred as a result of offering 6 month PNs to ex-CBS investors (~2.3m GBP, including interest).
  • C&B has 27 properties with 0 equity at present. I don't know what the average price of these assets is, let's say 150k GBP. House prices would have to increase by ~75% over the IVA timeframe for C&B to repay just the original monies (forget the interest) of their 3m GBP debt, and ~100% if you were to include the frozen interest - these kinds of increases are just not realistic over a 5-7 year timeframe. And this assumes the mortgage interest rates do not increase either, which will eat into/negate completely any profit from rent monies. So C&B are not going to be able to rely purely on an increase in asset values to cover debts ... and C&B will not be able to attract any new investor monies into the business.
To find out how rigid IVAs are in practise, I called the Consumer Credit Counseling Service (0800-138-1111) which is a charity that offers debt counseling and free IVA consultation - there are no up-front costs. It seems that IVAs can be quite flexible, with the ability to suspend monthly payments by up to 6 months, payment of lump sums at the end of the 5-7 year period - they didn't charge any upfront fee, but would take 15%+VAT off any monthly payments made.

[Liam response]: We have called this company a long time ago and they are great for reducing a personal bank loan payment to £1 per month but they are rubbish for dealing with the situation we have. The people trained are not qualified to deal with this situation and the complexity.  I really do not see how we can ever repay anyone now. We had so many funds set up all which were capable of repaying the debt and all have now been ruined by the (Sally & Jasmine's) blog.

That has been the full extent of my IVA investigation for C&B, which is to say bugger all, pardonnez mon francais.

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