The professional negligence, group action and fraud team at Penningtons Manches LLP, led by partner David Niven, is currently acting for hundreds of claimants to recover their “lost” investments in off plan purchases of failed (and probably fraudulent) hotel and student accommodation schemes owned by companies controlled by Rafik Patel. Patel has now fled the UK and is believed to be in hiding in the United Arab Emirates.
Proceedings against Graham & Rosen solicitors are at an advanced stage of preparation and will shortly begin at the High Court in London. Penningtons Manches is acting on the basis of a full “no win no fee” arrangement, with clients sharing only the cost of court fees.
The investment schemes developed by Mr Patel involved attracting a large number of small, or relatively small, investors who each entered into an agreement for lease of a particular room in a specified building (a hotel or student accommodation) with a view to receiving rental income after deduction of management expenses. The total amount of investment attracted is in excess of £53 million.
Penningtons Manches’ group action lawyers have now opened their books to claimants affected by similar but larger investment schemes operated by Oak Property Partners Ltd and Oak Forest Partnership Ltd, and again involving Graham & Rosen. The failed schemes entailed the attempted acquisition by investors of hotel rooms sold at the Hever Hotel in Kent and Needham House Hotel near Hitchin, Hertfordshire. Graham & Rosen was engaged to act for the investors.
Under the £28 million project, “buy-to-let” rooms were sold to investors with a guaranteed 10 per cent annual return. That promise has, however, been torn up, leaving investors at risk of losing hundreds of thousands of pounds and the companies which sold the schemes apparently insolvent.
Penningtons Manches has concerns about the roles played by Graham & Rosen and those behind Oak Property Partners Ltd and Oak Forest Partnership Ltd. As Judge Charles Purle has found in the Oak companies’ insolvency proceedings, investors in their hotel rooms were given ‘extravagant promises of a guaranteed return which appear to have been more than optimistic and possibly reckless or wantonly misleading’.
The group action team is therefore investigating the activities both of the Oak companies and those behind them, as well as scrutinising the role played by Graham & Rosen.
Penningtons Manches has a significant track record in dealing with group action claims. Relevant experience and resource in this type of case are essential to protecting the interests of claimants and achieving the most cost-effective solutions.
The team frequently has to challenge indemnity insurers acting behind the scenes who may suggest that their insured’s (Graham & Rosen in this case) limit of indemnity has been exhausted because they can combine or aggregate claims as one.
If you would like to join the Hever Hotel/Needham Hotel group action which has been launched by Penningtons Manches’ dispute resolution specialists and/or require more information on a no obligation basis, please contact David Niven at the firm’s London office.