High Court orders two companies into liquidation after £1.5 million land banking scheme

Two Liverpool companies found to be the ‘bookends’ of the transactions to sell plots of undeveloped land to investors, one company being the land owner and the other being the ‘developer’, have been ordered into liquidation in the High Court on grounds of public interest following an investigation by the Insolvency Service.

The court heard how the land owner JDG Properties Limited benefited by 100% from each plot of land mis-sold by a marketing company called Gilbert Webb Estates Ltd and how Tithebarn Trading Ltd encouraged those sales by appearing to be a developer of the site.

JDG Properties Limited traded under the umbrella of ‘Liverpool Investment Solutions’ and had bought land in Cheshunt Hertfordshire connected with a Carl Ballard in April 2011 for £130,000. It retained a quarter of the site and divided the rest into 390 plots for sale to the public.

The plots were marketed and sold to the public by Gilbert Webb Estates Ltd and was ordered into liquidation on grounds of public interest on 18 December 2014.

The ‘development company’ Tithebarn Trading Ltd entered into 5 year option agreements for 50p with some investors to buy back their plots of land at a price of £52.43 per square foot equating to a supposed overall site value of over £20 million.

The companies’ director Elster admitted in court that planning permission for the site was unlikely and that obtaining it would be like him ‘winning the lottery’.

Welcoming the court’s winding up decisions Chris Mayhew, company investigations supervisor, said: "Whilst neither of Elster’s companies was directly involved in the sale of plots of land to members of the public, they were symbiotic to the land banking scheme and fortified the mis-selling of plots of land by Gilbert Webb Estates Ltd enabling all involved in the scheme to profit apart from investors.

"The scheme made no commercial sense and was once more calculated to part honest people from their money.

"The Insolvency Service will not allow companies to operate in this way and will investigate abuses and close down companies if they are found to be operating against the public interest."

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