Companies sold car park spaces they didn’t own

A Bolton-based company which persuaded clients to invest almost £11.5 million in parking spaces at a site in Styal near Manchester Airport have been wound up by the courts.

Drake Estates Property Company Limited was wound up in the public interest on July 3 in the High Court in Manchester and at the same hearing a second connected company, Aston Darby Group Limited, was also wound-up.

The Official Receiver was appointed as liquidator of the companies, and on July 9 Paul David Allen and Chad Griffin of FRP Advisory Trading Limited were appointed joint liquidators.

The court heard Drake Estates sold car parking spaces to the public as an investment opportunity at a site in Styal, near Manchester Airport.

An Insolvency Service spokesman said: “Complaints, however, were made about Aston Darby Group and Drake Estates and the Insolvency Service carried out confidential enquiries into the two companies.

“Investigators uncovered that Drake Estates began trading in October 2016, selling car park spaces at the Lode Hill site but did not own the site.

“The second connected company, Aston Darby Group, also sold parking spaces at the site close to Manchester Airport on behalf of Drake Estates.

“Funds received from investors were used to purchase the Lode Hill site in the name of an offshore company acting as trustee for Drake Estates.

“The property, however, was subject to a unilateral notice and the transfer of the property’s title to Drake Estates’ trustee has still not been registered with the Land Registry.

“Investigators established that between October 2016 and December 2019 Drake Estates and Aston Darby Group sold circa 456 car park spaces at the Lode Hill site for close to £11.5 million.”

The court also heard that Aston Darby Group sold more than 630 car park spaces at a site close to Glasgow Airport between April 2017 and December 2019 for more than £14.3 million.

The companies sold individual car park spaces to investors for £25,000 and investors were guaranteed an eight per cent return over the first two years of investments at the Lode Hill site.

Investigators, however, established that these guaranteed returns were paid to the investors from the original investments rather than income generated by the car park.

The spokesman added: “The company made misleading claims in its sales brochures and marketing materials.

“Documents claimed the site was already generating yields of eight per cent, and failed to make clear Drake Estates did not own the Lode Hill site.

“Investors were also misled into believing planning permission had been granted for the Lode Hill site and that their funds would be specifically used to buy a parking space when 50 per cent of their investments was used to fund commission and other charges by the company.

“In addition no development activity has been undertaken to convert the Lode Hill site into the ‘state of the art’ car park investors were led to expect.

“Approximately £2 million raised from investments in the Lode Hill site was used to part-fund the acquisition of the site in Glasgow without the knowledge of the Lode Hill investors.

“Investors in the Lode Hill site were also led to believe they would acquire long leasehold titles to their property. However, Drake Estates could not fulfil this as because of the unilateral notice against the property.”

The winding-up petitions were presented against both companies in June 2020 and were initially due to be heard in September 2020. But at a hearing on July 3, the court accepted it was appropriate to expedite the proceedings and heard the petitions that day.

The court accepted the two companies had operated with a lack of commercial probity and with a lack of transparency, as well as failing to fully co-operate with the investigation and failing to maintain and deliver financial information to the investigators.

David Hope, Chief Investigator for the Insolvency Service, said: “Drake Estates unscrupulously secured millions of pounds worth of investments from members of the public using misleading sales tactics.

“The court rightly recognised the potential damage done to investors by Drake Estates selling a flawed business model, and has acted swiftly to shut the companies down.”