Dylan Harvey Residential, a Lancashire-based property company, has been placed into administration.
The firm acted as a sales agent for residential schemes in Manchester and the North West where private investors paid around £6.5m of deposits for residential apartments – many of which were never built.
These include Clippers Quay in Salford Quays, Zararchie Tower, Bengal Mill, both in Ancoats, and phases two and three of a development known as Fresh Salford.
Investors had been unable to secure mortgage funds to complete on key schemes over the past twelve months which had ‘a material adverse impact on Dylan Harvey Residential’s cash flow’.
The company also suffered from its contractual partners postponing developments and being placed into liquidation which resulted in the write off of significant funds paid as deposits by Dylan Harvey Residential.
It had a stated turnover in excess of £50m and contingent liabilities of approximately £100m as at April 2009.
Mark Getliffe and Diane Hill at Manchester-based administrator CLB Coopers has been appointed to takeover the business.
Getliffe said: ‘We are working hard to finalise the full financial position and explore all the options in respect of any value which can be recovered for creditors including working with the Dylan Harvey Group in relation to an enhanced position for creditors.
‘The business appears to have failed because of the domino effect of the residential property market grinding to a halt. It was also affected by one of its contractual partners, Fresh Developments going into liquidation in April this year, owing Dylan Harvey Residential £1.7m.
‘In some ways not having to contractually complete on properties valued at the peak of the market and for which mortgages may now no longer be available may have limited the potential losses to the clients.’
In a statement, Dylan Harvey Group, the parent company to Dylan Harvey Residential, said: ‘Within the administration process DHR will propose a Company Voluntary Arrangement (CVA), which in broad terms will seek to ensure that all unsecured creditors of Dylan Harvey Residential are given the opportunity to realise the value of monies paid to Dylan Harvey Residential within the formal process.
‘Subject to further legal advice the Dylan Harvey Group may be able to offer creditors the opportunity to exchange their claim against Dylan Harvey Residential for a Dylan Harvey Group property purchase opportunity.’
There are around 500 creditors of Dylan Harvey.