Customers paid millions of pounds for holiday lodges which were never built
PUBLISHED: 14:53 23 April 2019 | UPDATED: 11:56 25 April 2019
Investors poured millions of pounds into holiday lodges which were never built, new documents show.
More than 1,150 people claim they are owed a combined £25.6m by Walsham Chalet Park Ltd which traded as Dream Lodge Group until it collapsed in January.
The firm's administrator, Deloitte, said there should be around £4m left for creditors after the company was sold for £12m and most of the money was used to pay off bank debts.
The holiday parks, including in North Walsham, Bury St Edmunds and Stretham in Cambridgeshire, are now operating under new management.
Investors were attracted to the group by promises of rental returns of 8pc or a guaranteed profit after three years.
They were paid those returns but investors stopped getting rental payments in September last year.
Deloitte said in a report to creditors the firm collapsed after it could not keep up with payments to investors who are owed around £5.3m
Another £14.3m is owed to another 170 investors who paid for lodges which were never built, Deloitte said.
The administrator added that it was also investigating claims that some customers sold their lodges and were never paid the money.
One investor from the North West, who did not wish to be named, put £165,000 into a lodge at Fornham Park near Bury St Edmunds. She stopped receiving rental payments last summer.
“It is going to change my life drastically,” she said. “I'm still waiting to see what will happen.”
Mark Hughes, from Cornwall, invested £135,000 in a share of two lodges at the group's Norfolk Park site in North Walsham and another site in Berkshire.
He was expecting returns of £900 a month but those payments stopped in October last year.
The 59-year old said previously he had to be signed off work for three months with severe anxiety.
Mark Kent, a former manager at the group, said after the collapse in January that customers had effectively invested in “fresh air”.
Other creditors include HMRC, owed £340,000 and trade creditors owed £2m.
Deloitte also revealed that it is hiring data recovery experts after electronic records were deleted by company directors just before the administrator was appointed.
The firm was owned by director Simon Moir and his family.
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