Investors owed £25m after holiday park crash will only get £1.3m back
PUBLISHED: 12:23 19 August 2019 | UPDATED: 12:27 20 August 2019
Hundreds of customers who poured £25m into holiday park lodges will get back just a tiny slice of their investment, according to administrators.
Dream Lodge Group, which ran eight sites including Fornham Park, near Bury St Edmunds, and Norfolk Park, near North Walsham, went into administration in January, causing 80 job losses.
A total of 1,154 investors are owed an estimated £25.6m after buying into the luxury lodge scheme, which promised a return of 8% on investments of between £25,000 to £400,000 - plus four weeks holiday a year at any one of the parks.
Administrators Deloitte sold the business and its assets for £11.2m to Exclusive Luxury Lodges in February.
Deloitte said Dream Lodge's bank had been repaid in full the £7.8m it was owed, while a further £52,000 owed to "preferential creditors" was also likely to be paid in full. It said Deloitte's £1.95m fees had also been drawn.
But the administrators revealed the 1,154 "unsecured creditors", who invested in the lodge scheme, would only receive a dividend to be determined after claims were assessed in the next couple of months.
A Deloitte spokesman said the dividend would be around 5% of their investment to be paid by the end of the year - amounting to an estimated £1.28m of the £25.6m.
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He said administrators were also carrying out investigations to find other potential assets, which may bring further dividend payments.
Investors had paid up to six-figure sums to join the scheme, which offered rental returns or a guaranteed profit after three years.
But the rental payments stopped last year. And it later emerged that 170 investors were owed £14.3m for lodges that were never built.
Deloitte also said it was trying to get back £418,000 owed to the company by its director and majority shareholder Simon Moir.
After the firm's collapse, administrators said a "period of financial pressure" had led to its demise.
One investor in Fornham Park said the company's closure would drastically change her life. Another investor who paid £135,000 from his late mother's inheritance for a share of lodges, including at Norfolk Park, said he was stressed and struggling to cope financially.
Exclusive Luxury Lodges, trading as Countrywide Park Homes, said it worked "tirelessly" to ensure a smooth transition after buying the holiday parks.
The company has since partnered with Hoseasons and said "various measures" were in place to ensure the parks' success.