Land Strategy plc was placed into liquidation on 30 July 2009, with an estimated deficiency to creditors of £78,900.
Kevin and Lynn Hilton were directors of the company from 8 December 2006 to 22 February 2008 and Darren Butt was a director from 22 February 2008 to 30 July 2009.
The company sold plots of land on a 38 acre green belt site at Studley in Warwickshire marketing the plots as having investment potential were planning permission obtained for the land. In reality the plots were effectively worthless.
The directors did not dispute that: –
1. Land Strategy plc (“Land Strategy”) caused its customers, by misrepresentation or by omission, to purchase the plots at an excessive overvalue, when they knew or ought to have known that there was little or no prospect of the plots achieving planning permission for residential development.
The land being sold was divided into 429 plots by reference to an estate plan. The land had cost of £6,579 . L per acre and Strategy sold the plots at prices ranging between £101,124 and £311,957 per acre, an average of £200,883. Land Strategy represented to its customers that the plots were an “investment” , but did not inform its customers that the land was subject to restrictive covenants limiting its use to agricultural use, and requiring the payment of 25% of any uplift in value were planning permission to be obtained and the contract terms were set up so that it would have been impossible to discover these covenants until they were bound into the contract. Land Strategy informed some of its customers that planning permission had been obtained or applied for parts of the site, when it had not. Subsequently the local authority refused an application for outline planning permission on one of the plots. During the period of Mr Hilton and Mrs Hilton’s directorship Land Strategy’s receipts totalled £975,952. During the period of Mr Butt’s directorship Land Strategy’s receipts totalled £1,932,000
In addition Mr Butt did not dispute that
2. He failed to ensure that Land Strategy maintained and/or preserved adequate accounting records or alternatively, he failed to deliver up such records to the Joint Liquidators. As a result it has not been possible to verify the purpose of cash withdrawals totalling £148,600 made between October 2008 and June 2009 nor transfers totalling £1,500,116 paid out of Land Strategy’s bank accounts between February 2008 and the date of liquidation .
3. From 19 May 2008 to 30 July 2009 he failed to ensure that Land Strategy complied with its statutory obligations to submit returns and make payments thereon to HM Revenue and Customs
Claire Entwistle, Director of Company Investigations North, says: –
“The directors of this company set out to sell worthless farm land at a massive profit to them, preying on members of the public with a hard sell and misleading information. The public need to be aware that a plot of land in a field may well not be an asset with investment potential and if promised returns appear to be too good to be true, they probably are. The public can also be assured that The Insolvency Service will take robust action when it becomes aware of any such land banking scheme. However as with any land purchase the public are advised to take independent legal advice before committing to any contract”
Have your say on this story using the comment section below