On 29 November 2024, Jimmy Fish and Craig Johns of Cowgills and Paul Cooper of Begbies, as the joint administrators of The Great George Street Project Limited – in administration (“the Company”), completed the sale of the stalled property development site located at George Street, Liverpool for £10m to Liverpool City Council.

Partner, Mark Hague, led Farleys’ insolvency team; Mark was assisted by Jane Haymes, Ella Holden, and Armin Pishro who worked alongside Partner, Stephen Greenwood from Farleys’ commercial property team on the transaction.

Background

On 25 February 2022, the Company was placed into administration by one of its many creditors due to the development of the site becoming stalled. Upon their appointment, the joint administrators, led by Jimmy Fish, began to develop a strategy that would see the highest value being realised for the company’s sole asset which was the property development (the Site). The Site is a 4.55-acre brownfield plot that sits at the gateway of Liverpool’s historic Chinatown.

The Site consists of Phase 1 and Phase 3, which were intended to be developed into a mixed-use commercial and residential development, along with Phase 2 which remained in the ownership of Liverpool City Council subject to a Tomlin Order relating to proceedings that were settled prior to the Company’s administration.

After working with their property agents, the joint administrators decided that selling the site as a whole would provide the maximum return for creditors. An extensive marketing campaign was undertaken, which ultimately led to Liverpool City Council making a £10m offer for the Site.

Legal complexities

As the Company had partly funded the development with bank finance and via “off-plan” investor deposits, the titles to Phases 1 and 3 were very complicated, and the joint administrators had to carefully balance the competing interests of the various creditors across both phases. Also, due to most of the investors in Phase 1 being located in the Far East, a substantial application to the High Court in Manchester was required to enable the joint administrators to sell the site free of secured interests.

On 15 November 2024, His Honour Judge Cawson KC approved the joint administrators’ application pursuant to Paragraph 71 of Schedule B1 to the Insolvency Act 1986 to sell the Site to Liverpool City Council for £10m.

As part of the application, the joint administrators had to satisfy the Court that the market had been fully tested, that the sale price was at market value, and that how the joint administrators intended to apportion the sale proceeds was appropriate.

The joint administrators will return to court in early 2025 for the court to decide how the Phase 1 proceeds of sale ought to be distributed. This is due to a dispute between different creditors and the creditors have been allowed to file evidence in court and make representations on how they wish for the court to decide the matter.

Outcome

The sale will enable very substantial returns to be made to a variety of creditors across both phases. The sale will also enable Liverpool City Council to develop a site of real public importance that has plagued the local residents since the company’s failure.

Mark Hague said,

“I am delighted to see the sale of the property finally complete. This has been a long-running case with several legal complexities along the way, and I am pleased to see the work that has been done will see substantial returns made to creditors.

“I am very grateful to the fellow professionals who have assisted us throughout this matter including, Ian Tucker and Dr Anja Lansbergen-Mills of Counsel from Exchange Chambers, Tom Snook and Harvey Bennett from Pantera Property, and Louise Robinson and her team from Trowers who acted for Liverpool City Council. This has been a multi-team project and shows the strength we have within Farleys to deliver results of substantial value and complexity for our clients.”

Stephen Greenwood, partner, said,

“This has been a difficult transaction not just because of the company’s insolvency but due to the various titles with a number of different secured interests, but we are pleased to get the sale done so creditors can be repaid.”