An investigation by this newspaper has revealed concerns over the future of a multi-million pound property development of nearly 300 homes following the collapse of three companies owned by the developer.
Graham Avery is the owner and director of Pine Developments Ltd which has borrowed around £10m to redevelop the site of the former Pontins holiday park in Hemsby, near Great Yarmouth. The project received planning consent earlier this year to build 188 homes and 91 holiday lets on the long-dilapidated site, which will also have a convenience store and leisure centre with gym and swimming pool. But last year another of Mr Avery’s companies went into administration having failed to repay a penny of a £21m loan. Pine Developments owed money to that firm, Tokenhouse VB Ltd, and the creditors want their money back. Tokenhouse also loaned millions to other Avery-controlled companies, including Corporate Commercial Collections Ltd, (CCC) which lent £1.4m to Pine Developments. CCC too has now gone bust.
In addition to owing money to Tokenhouse’s creditors, and CCC’s creditors, Pine Developments also has a mortgage with commercial lender SHP Capital, which is owed millions from the collapse of CCC.
Kim McAdoo, founder of the Hemsby Action Group, said: “It makes me decidedly uneasy. It sounds to me like it’s built on a house of cards. “I’m extremely worried because if the Pines development goes bust then we’re back to square one, you’re looking for someone to take it on and are they going to honour the stipulations for the holiday accommodation because that’s crucial employment in the village.”
Tokenhouse VB Ltd is owned by Graham Avery and his long-time business partner Laurence Rutter. It was formed in 2015 and in 2018 took loans totalling £21m from a company called VAT1SP a Korean investment fund registered in the Cayman Islands. The money was supposed to set up Tokenhouse to provide short-term bridging loans to developers to cover the VAT payable on commercial property purchases until Tokenhouse’s clients could reclaim that VAT from the taxman. But by the time the first part of that loan came due for repayment in May of last year, Tokenhouse had failed to repay a single penny, nor any interest. VAT1SP called in all its loans and Tokenhouse went bust going into administration on September 1 2020. Administrators then discovered that Tokenhouse had loaned £15m to other companies owned and controlled by Mr Avery. These included Pine Developments Ltd, the vehicle behind the redevelopment of the Hemsby site.
In January 2020 Tokenhouse agreed to provide a loan of upto £4.5m to Pine Developments, repayable within a year, although that repayment date was later extended to the end of 2022. According to the administrators, Pine Developments received more than £1m from Tokenhouse. The Administrators have concluded that there is “no realistic prospect” of Tokenhouse surviving, nor do they believe there will be enough money to pay any unsecured creditors, that is to say, anyone but VAT1SP.
Tokenhouse loaned a lot of money to other companies controlled and owned by Graham Avery and frequent his business partner Laurence Rutter. According to reports filed at Companies House, Tokenhouse lent £7.4m to Corporate Commercial Collections Ltd (CCC), as well as £7.5m to six other connected companies. Mr Avery and Mr Rutter have been 50/50 shareholders in CCC since early 2016. Mr Rutter is no longer connected to Pine Developments Ltd. In addition to the £7.3m from Tokenhouse, CCC borrowed £5m from a commercial financing company called SHP Capital Ltd.
When the administrators came calling for Tokenhouse’s £7.3m, CCC transferred funds and clients into yet another company controlled by Avery and Rutter, Alexanders Discount Ltd, in June 2021. But that company was put into voluntary liquidation after the administrators challenged the legitimacy of those transfers, becoming the third Avery business to go under since September. Administrators believe CCC cannot be rescued as a going concern, but intend to sell the business and recover the inter-company loans. CCC has lent £1.4m to Pine Developments Ltd.
Pine Developments Ltd purchased the former Pontins site on February 19 2019, for £4,000,000. By January of this year Pine Developments’s accounts showed they had long term debts of around £10m, as well as assets of around £11m. Those debts include £1.4m to CCC, now in administration, and an unconfirmed amount to Tokenhouse, also in administration. Companies House documents reveal that Pine Developments paid Tokenhouse £50,000 in loan interest between September of last year and March 2021.
Additionally the company has a mortgage for the Pontins site held by SHP Capital Holdings the company which is now owed £5m following the collapse of CCC. There is no suggestion that Pine Developments is insolvent, nor that Mr Avery or Mr Rutter has done anything illegal, and the company is currently servicing the interests on its debts.
Meanwhile when the EDP visited the Pontins site this week it was clear a great deal of progress has been made. Former holiday chalets have had their broken windows removed, as well as roofs and ceilings, and a number of new buildings are in various stages of completion.
Tracey Pashley of The Pines insisted everything continued to run smoothly at the development, which has recently erected a number of new structures visible from the main road. She said: “It’s amazing. We’ve just got our flags up, so it’s coming up lovely. We’ve had no problems. She said she knew nothing about any financial problems elsewhere in the group and said Mr Avery would answer our questions. Mr Avery has not responded to repeated requests for comment.
Great Yarmouth borough councillor James Bensly told this paper: “I can only take Mr Avery on face value and everything is happening on the site which he said it would. “Businesses do fail and that is the challenge. Fingers crossed this one does happen.”
Liquidations specialist Andrew McTear of liquidators McTear Williams & Wood told the paper the administrators would not necessarily be in a hurry to call in loans lent to Pine Developments. “We would expect common sense to apply”, he said, adding that it might make more sense for the creditors to wait until the units are available for sale and more money can be realised than if debts are called in early.
A spokeswoman for SHP Capital said: "SHP Capital had made a secured loan to CCC Finance and made the commercial decision to put the company into administration to protect our investment. SHP Capital is on track to secure full repayment of its loan. "SHP Capital has provided a secure loan facility to Pine Developments, we recognised this as an attractive opportunity to redevelop a disused site into a vibrant destination that would benefit the local community. "The investment into Pine Developments is a separate facility and we treat this as a separate loan to CCC Finance. We remain fully committed to this project and will continue to monitor the loan throughout the term."
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14 August 2021