Hallam Estates Ltd – born 14 December 1995, died – 17 December 2020. The High Court read the last rites last Thursday but the issuing of the order makes it 100% official, to be followed up by an entry in The London Gazette.
Since 1665 this has been the official journal of record and the newspaper of the Crown, focusing on, among other things, insolvency, both corporate and personal. It enables creditors to find out who is now managing the affairs of whoever owes them money. So if you are owed money as a result of Hallam’s collapse, contact the administrators – Begbies Traynor at Toronto Square, Toronto Street, Leeds, LS1 2HJ.
A visit to the Gazette’s website and a search just on the Grand’s unique postcode, CT20 2XL, and you will see a sorry tale going back to 2003. Just what did another of Stainer’s now defunct companies owe Speedy Hire Centres (Southern) Ltd in February 2003 or HMRC in April 2005? On both occasions, it was a company called Kentish Apartments Ltd and its director was Michael Stainer.
But Hallam’s origins are much more interesting. By 1994, Stainer was facing personal ruin, as a result of a combination of borrowing from Barclays Bank and a protracted legal battle with leaseholders over, guess what, service charges. As far back as August 1988, the then manager, Mr Carter of Cluttons, tendered his resignation on the basis the Grand was impossible to manage because Stainer wouldn’t pay his share to the maintenance fund, leaving an annual shortfall of 19%.
In fact, as far back as September 28th 1983, Stainer admitted as much to Lesley Watkins, a former resident of the Grand and an active member of the Residents’ Association, writing:
“Landlords Maintenance Contribution: As you rightly point out, I am obliged to pay about 20% of the maintenance costs.”
On February 16th, 1995, Stainer entered into an Individual Voluntary Arrangement (IVA), and Susan Maund, an insolvency practitioner from BDO Stoy Hayward, was appointed to manage it. An IVA allows a debtor to avoid bankruptcy by doing a deal with creditors and offering them a specific amount which invariably heavily discounts the full debt. The majority creditor in this case was Barclays Banks, with leaseholders owed around £120,000, powerless to have any impact on proceedings.
Under the terms of this IVA, Stainer was to contribute £60,000 from his income over a three-year period. Luckily for him, his mother passed away and he inherited £60,000 which went into his IVA under a “windfall” clause. Notwithstanding, Ms Maund regarded his non-contribution from income as a failure when she submitted her closing in July 2000 report to the Court.
This IVA was linked to the appointment of Coopers Lybrand, as Receivers for the freehold of the Grand on December 13th 1994 on the petition of Barclays Bank. Their fixed charge over the freehold gave them the right to sell the freehold and use the funds to repay the debts. This transaction is shrouded in mystery, and took place without leaseholders being able to exercise their rights of first refusal under Part 1 of the Landlord and Tenant Act 1987. This was, and is, a criminal offence. The sale took place to a newly formed company, Hallam Estates Ltd, and to add insult to injury, leaseholders were to see Stainer return as a “shadow director” of this newly formed company.
For the avoidance of doubt, check out the original forms that incorporated Hallam Estates Ltd (below). and this hand-written note on the back of one page of the application. No sign of the name Stainer, but the handwriting – unmistakeable! Note how he asks the Registrar of Companies if the incorporation certificate can be “expedited as it is intended the company will acquire a property on 14th December 1995.” That is chutzpah on a sublime scale, not that Mr Stainer will appreciate being praised with a Yiddish word.
So, in a deal whose details are no longer shrouded in darkness, The Grand was sold out of receivership to Hallam Estates. In the words of Ms Maund, the supervisor of Stainer’s IVA, this was “to the best of my knowledge an unconnected company”. How easily fooled Ms. Maund was, but she was in good company.
All of this comes from Ms. Maund’s closing IVA report issued in July 2000 to Canterbury Court case no: 571 of 1994 under the Insolvency Act 1986.
The original applicants in the formation of Hallam Estates were Neil Howard, a financier from Canterbury with his wife, Joan as company secretary. The sole shareholder was Craig Griffin, who has an extensive investment background in care homes.
In March 1998, Roy Seidenbird becomes a director and Stainer as name appears for the first time as the contact for Companies House. In May, Seidenbird resigned and the name of Peter Sarstedt (no, not that one!) appears as a director. He is from Hanover, Germany and was described as a close friend or possibly relative of the new Mrs Stainer, Doris.
So by 2000, the ‘A’ team is back in charge with Michael Stainer and Peter Sarstedt as directors, and Doris as company secretary. Sarstedt also owns the one share in Hallam.
The price Hallam Estates paid for the freehold of the Grand was £148,000. If there was a bona fide valuation attached to this purchaser, it has not come to light.
Present leaseholders should do well to learn the lessons of 1994-6. Already in the last two months, we have seen Stainer try and buy back in auction, two of his wife’s former flats, the Dorchester and the Edinburgh, He was successful in bidding but then couldn’t raise the cash to complete. Luckily, we understand the leaseholders are thoroughly clued up so Hallam’s administrators will certainly play this one by the book.
Already within days of the administration order, Creative Folkestone who are guardians of the Metropole Collection and Folkestone Museum, have removed their works of art for safekeeping lest they be sold off to pay the debts. Past and present directors will be interviewed, the books interrogated, questions asked about the companies that trade within the Grand without leases or tenancy agreements and by Stainer’s own testimony, receive a £200,000 per annum subsidy from the holiday flat rentals.
“Oh, what a tangled web we weave, when first we practice to deceive!”
The Shepway Vox Team
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