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The four companies are:
- Park First Freeholds Limited
- Help Me Park Gatwick Limited
- Park First Glasgow Rentals Limited
- Park First Gatwick Rentals Limited
Finbarr O’Connell, Adam Stephens, Emma Thompson and Andy McGill of Smith & Williamson LLP have been appointed as joint administrators. The administrators’ function is to act in the interest of each company’s creditors as a whole.
Email: [email protected]
Telephone: UK: 020 7131 8912 or International: +44 20 7131 8912
Address: c/o Smith & Williamson LLP, 25 Moorgate, London EC2R 6AY
Who are the companies in administration?
The companies that have gone into administration include the two companies that have entered into Buyback arrangements with investors (Park First Freeholds Limited and Help Me Park Gatwick Limited).
In addition, the companies that entered into the Lifetime Leaseback (Park First Glasgow Rentals Limited and Park First Gatwick Rentals Limited) have also entered administration.
Why are the companies in administration?
The companies are in administration because they have insufficient funds to pay in full all investors who chose the Buyback arrangements and because of the rental companies’ actual or potential liabilities.
We have been monitoring Park First’s financial position and earlier this year we raised our concerns about the companies’ financial position. The directors of the companies have now received independent advice and this has led to their decision today to appoint the joint administrators.
What is the purpose of the administration?
We understand the purpose of the administration is to allow the companies to prepare proposals for company voluntary arrangements (CVA) to ensure that all investors are treated fairly.
It is not certain that the administrators will propose CVAs. They may not do so if they believe it is not in investors’ interests, for example.
What is a company voluntary arrangement (CVA)?
A CVA is a legally binding agreement with a company’s creditors about how best to deal with the company’s assets for the benefit of creditors, including investors. Any proposal must be approved by the creditors, which includes the investors, in a meeting. Approval requires a special majority consisting of a majority which comprises at least 75% of the company’s unsecured creditors who vote, by value. 50% of the company’s unconnected creditors, by value, who vote, must also vote in favour of the CVA proposals in order for a CVA to be approved. This ensures the proposal has the backing of a strong majority in both number and value. Once approved, a CVA is binding on the company and all creditors, including those who voted against the proposal and those who did not vote. A CVA is monitored by an independent supervisor, who is a licensed insolvency practitioner.
What does the administration mean for investors?
The joint administrators’ first job is to fully investigate the companies’ financial position. When they have done that, they will tell investors what they think is the best way to advance investors’ interests. It is likely they will propose company voluntary arrangements (CVAs) for each of the companies, although this is not guaranteed.
In the meantime, no payments will be made under Buyback Agreements and no payments will be made to investors under the Lifetime Leasebacks.
The car parks will continue to operate.
As a result of the FCA’s work, substantial additional funds, amounting to approximately £33 million, have been made available and are held securely for the benefit of creditors, of which the vast majority are the investors. The FCA believes that they should be made available for the purposes of the CVAs and the directors of Park First have agreed to this.
The joint administrators will contact investors directly and will explain how the CVAs would work and what investors’ options are. They have told us that they are writing to investors immediately, and that they hope to put the CVA proposal to investors within 2 months. They will keep investors informed about their progress. Further information can be found on the administrators’ website.
What action has the FCA taken so far?
In December 2017, we announced that we considered that Park First Limited and related entities had been promoting and operating airport car parking investment schemes unlawfully. Read our press release.
Park First agreed to stop operating and promoting the original schemes, although they did not accept that they had done anything wrong. They offered investors the choice of getting their initial investment back (which they described as a ‘Buyback’), or moving into a new ‘Lifetime Leaseback’ scheme, which was restructured to avoid the legal issues identified by the FCA. The Lifetime Leaseback is not a collective investment scheme and is not regulated by us. This was a better option for investors than the alternative which would have required the FCA to wind up the scheme, resulting in substantial losses to all investors.
Under the Lifetime Leaseback, investors granted a long lease of their parking space to a Park First company, either Park First Glasgow Rentals Limited or Park First Gatwick Rentals Limited, depending on the location of the parking space. These companies were to pay a fixed amount of rent (equivalent to 2% of the purchase price the investor paid to buy the space). They also issued a share to investors for each space the investor owned, potentially allowing investors to receive dividends.
We also ensured that Park First promised not to dispose of their assets, and that they ringfenced their major asset, a cark park at Luton Airport, which was not owned by the scheme, to meet Buyback payments. Earlier this year the Luton car park was sold and the FCA required the proceeds of sale – £32 million – to be held securely in a solicitor’s client account. Those funds are to be used for the benefit of investors. A further £1 million contributed by a party connected to Park First is also held securely. The FCA believes, and the directors of Park First have agreed, that these funds should be made available for the purpose of the CVAs that the joint administrators anticipate proposing.
What is the FCA doing?
We have been in discussions with Park First and the joint administrators about the steps that should be taken for the benefit of investors. We continue to work to achieve the best outcome we can for investors. We have also reserved our rights to take further action, and will do whatever we consider appropriate to protect investors’ interests.
We will carefully review any CVA proposals to consider whether they are in the best interests of investors. However, investors will need to decide for themselves whether they wish to vote in favour of the CVA proposals: more information will be made available by the joint administrators.
We have fully reserved our rights to take further action, including bringing legal proceedings. The action we take will be informed by the nature of any CVA proposals. We are working to secure the best possible outcome for investors and are fully prepared to take such further action as is required.
I’ve been trying to get my money out of the scheme for a while – why have I not been able too?
To ensure the fair treatment of all investors, we allowed Park First until June 2018 to arrange Buybacks and Lifetime Leasebacks with investors. We also agreed that Park First should have time to make arrangements to pay all investors in full who wanted a Buyback.
We recognised that it was possible that more investors would want their money back than Park First could afford to pay. In that case, it was important that Park First should make appropriate arrangements to treat all investors fairly, and to return as much money to them as possible.
What has happened to the companies that sold the original investment?
The companies that sold the original investment still exist. Park First has told us that it is reviewing the position of these companies. These companies may also be placed into administration.
Do I need to use a third party to get my money back?
If you are approached by a company offering to help you recover your money, you should proceed with caution. For most investors, there will be no benefit in involving a third party in making a claim against the companies in administration.
If you have any questions about the administration process, please contact the joint administrators using the contact details above.
Do I need to use a third party to decide what to do?
The joint administrators will provide information about the financial affairs of the companies. If, as they expect, they propose a CVA, they will explain what it involves and what the options are. However, they will not be able to advise you.
You may take your own financial and/or legal advice, but you should bear in mind that you are unlikely to be able to recover the cost of that advice.
Being alert to scams
Investors should remain alert to the possibility of fraud. If you are cold-called by someone claiming to be from Smith & Williamson, please end the call and call them back using the number above. We do not expect Park First to contact investors and you should treat any calls claiming to be from Park First with caution.
Will investors be able to get compensation from the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS)?
We did not authorise any of the companies that have gone into administration. As a result, investors will not be able to claim compensation through the FOS or from the FSCS in relation to these companies.
However, investors who have dealt with a regulated firm, such as a financial adviser, may have other sources of redress. Investors may be entitled to complain to the regulated firm, and if they are not happy with the outcome of their complaint, they may be able to refer the matter to the Financial Ombudsman Service. Further information can be found on the Financial Ombudsman Service website: https://www.financial-ombudsman.org.uk/.
If the regulated firm they have dealt with is insolvent, investors might be entitled to bring a claim to the FSCS, e.g., for unsuitable advice on investments. Further information can be found on the FSCS website.