New blow for investors as Gavin Woodhouse hotel deal collapses
Private investors who handed their savings to the embattled financier Gavin Woodhouse have been dealt a fresh blow after forfeiting “a substantial amount of money” following the “disastrous” collapse of a plan to buy a Devon hotel.
The details of the failed deal are contained in documents submitted to the high court last week on behalf of creditors to Woodhouse’s businesses, when the entrepreneur lost control of three of his companies and a judge ruled his business model appeared to be “thoroughly dishonest”.
The hearing came just days after publication of an undercover investigation by the Guardian and ITV News, which posed questions about the business interests of Woodhouse, who has raised more than £80m from private investors but whose firms have a multimillion-pound “black hole”.
Woodhouse’s Northern Powerhouse Developments (NPD) had been selling investments in rooms of the Moorland Garden – a hotel on the edge of Dartmoor national park that is owned by Brian Meaden, the father of the BBC Dragons’ Den panellist Deborah.
NPD, which has a portfolio of 11 operational hotels, had paid a non-refundable deposit on the property understood to be in excess of £500,000. However, after missing several deadlines to complete the purchase, the deal has now fallen through.
The witness statement of Phil Duffy, a managing director of insolvency firm Duff & Phelps whom the high court appointed as an interim manager of three Woodhouse businesses last week, said: “Now that the purchase has collapsed and the deposit has been forfeited, the investments of any investors whose monies were used to fund the deposit paid by the NPD Group will have been lost.
“Quite simply, investors’ monies should not under any circumstances have been used, or put at risk, in this way”.
In court, Judge Sally Barber referred to the failure of the deal as “disastrous”.
The Guardian and ITV News’ undercover investigation showed how Woodhouse had raised £16m about five years ago from private investors to fund four care homes – none of which are operational and three of which have not been built.
Millions of pounds from those stalled care home projects were loaned to another company in which Woodhouse owns 60% of the shares, but that company has gone into administration and the cash appears to have vanished.
Woodhouse has denied any wrongdoing.
A spokesman for NPD said: “We remain in discussions with the owners of the [Moorland Garden] hotel and, despite the recent setbacks and media campaign against us, we’re still hopeful of a purchase.”
Meaden said he “withdrew from negotiations some time ago”.
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