Carlauren Group Ltd has gone into administration after its CEO Sean Murray lost a legal battle for control of its assets last week at the Insolvency and Companies Court.
Acting on behalf of administrators Quantuma LLP, law firm Crowell & Moring was successful in its bid to place the company into administration and seize control of its assets.
Following the ruling, Mr Murray told the court: “I am afraid I lost control. I hope they act in the best interest of everyone,” the BBC reported.
Joint administrators Quantuma LLP and Duff & Phelps LLP now take control of all 35 companies in the group in order to protect its remaining assets and investigate the use of investors’ funds.
The group’s investors told the court that £50m out of a £75m investment had gone “missing”.
Acting on behalf of himself, Mr Murray denied allegations that the funds had been misappropriated.
Around £25m has been invested in the group’s assets although most of these were never opened.
Carlauren, which employs 260 people, bought 25 properties across the UK, including Windlestone Hall, near Bishop Auckland, County Durham, which it acquired for £850,000 in 2017. The scheme was funded by selling individual rooms in those properties to investors for about £100,000 a time, but most of those homes never opened.
Quantuma was appointed administrator of three Carlauren subsidiaries earlier this year.
Carl Jackson, managing partner at Quantuma, said: “Following my investigation of three of the Carlauren group in my role as Joint Administrator earlier this year, I was extremely concerned by the findings, with millions of pounds of investors’ money uncounted for. While many investors were promised 10% per annum return on their funds through the care homes, many of the properties supposedly owned by Carlauren remain unopened and in some cases derelict.
“I am grateful to the Court for this verdict, as myself and Philip Duffy now have a formal remit to recover as much value as possible for creditors and investors. We will also be working with the 260 members of staff across the group that we understand have not been paid to identify the best outcome for them too. In the first instance, assessing the viability of the businesses under our control will be the priority, to secure the best outcome for all parties.”