Airport parking firm crash leaves investors stranded
PARK First has finally collapsed into administration, leaving more than 6,000 investors facing an uncertain future.
The group has been on a knife edge since 2017, when the Financial Conduct Authority (FCA) ruled that it had been marketing an unauthorised – and therefore unlawful – investment scheme, selling spaces in car parks close to Glasgow and Gatwick airports.
Instead of prosecuting the group’s bosses and its sales agents, the regulator entered into negotiations with it to find a way that the business could continue, yet sidestep investor protection laws.
Park First agreed to offer investors their money back, or give them a chance to switch to a ‘lifetime leaseback’ scheme, which the watchdog says was ‘restructured to avoid the legal issues’.
The regulator says: ‘This was a better option for investors than the alternative, which would have required the FCA to wind up the scheme, resulting in substantial losses to all investors.’
But investors who opted to get their money back have told The Mail on Sunday that obstacles were repeatedly put in their way, with correspondence left unanswered and legal queries raised.
I revealed earlier this year that the FCA had struck a secret deal with Park First, publicly telling its bosses to hand over refunds, but privately allowing them to force investors to face delay after delay.
Park First director Ruth Almond told me: ‘I will be very clear – the watchdog has required us to keep our agreement with them confidential.’
Meanwhile, investors were targeted by Park First with a barrage of offers based on the lifetime leaseback deal, under which the company did not have to hand over the full refund. The companies that were supposed to pay investors a rent under the leaseback agreement are among those now in administration.
The car parks are now in the hands of insolvency specialist Smith & Williamson. There have been complaints for some time that not all the car parks have been open for business. The insolvency firm says that rents due to investors will now be suspended, and payments still due under buy-back agreements will not be made.
Investors are being told by Smith & Williamson that it hopes to put together a series of ‘company voluntary arrangements’ to pay them whatever Park First can afford over a period of time.
How much will be available depends partly on whatever car park land the group has not sold.
There is believed to be £33 million in cash now under the administrators’ control, but claims are likely to far exceed this. How much investors paid the group is unknown, but an unconfirmed estimate is £150 million.
Solicitor Patrick Lawrence of London law firm Trainer Shepherd Phillips Melin Haynes has already started the ball rolling to bring a High Court action on behalf of a group of investors with claims against Park First. He says he has ‘serious doubts’ that any voluntary arrangement will lead to significant payments.
The collapse of Park First follows the winding-up of its sister company Store First, which operated the same business model to sell warehouse storage units as an investment. I warned as long ago as 2013 that salesmen had previously been involved in mis-selling land, wine and carbon credits.
False claims made in a promotional video fronted by motoring writer Quentin Willson helped Store First attract more than £200million, including large sums from investors’ pension savings.
The man behind Park First and Store First is Lancashire businessman Toby Whittaker, who seems to lead a charmed life as far as the FCA is concerned. He was a director of We Find Any Pension, which was investigated by the watchdog for operating without a licence. The regulator took no action except to put a notice on the FCA website saying the firm was not authorised. Now that its secret deal with Whittaker has failed, will the FCA think again about taking court action?
The regulator will only say: ‘We have fully reserved our rights to take further action, including bringing legal proceedings.’
Despite this, it seems the car parks could still end up being run by Toby Whittaker.
According to Smith & Williamson, ‘the companies’ former management intend, if the proposed company voluntary arrangements are accepted by the creditors, to take back the running of the companies’, with the insolvency firm itself supervising them.