· Joe Singagoga
The collapse of Collins Bone is a devastating blow for a great many people. Each investor has their own position but the vast majority will be under serious financial pressure as a result of recent events. To be making light of this, and in actual fact poking fun at the feeling of investors who have lost huge sums of money is poor conduct.
Joe’s views are echoed by a significant number of Collins Bone investors which may well be the majority once all responses are gathered. The blog of collins-bone-investors.blogspot.com is the isolated and libelous view of two aggrieved investors who identify themselves on the blog as Sally and Jasmine.
· A few of the investors…
These comments read in the same manner as the blog itself. We contest each item and question their authenticity. In particular, the blog has only garnered 2 comments to date both of which read in suspiciously the same writing style and language as the blog itself. It would appear that these two investors are posting comments on their own blog (in absence of genuine investors) and are then re-posting these as genuine investor comments later in their own blog.
Whilst the collapse has been borne out of error in both the business model and mistakes admitted by Liam & Davey, this isolated blog has not gathered any momentum whatsoever after a significant period of awareness from the majority of investors; raising questions over several claims on the blog that the George’s represent the view of the masses, as it were. It stands to reason that were this the case the blog would have attracted more than 2 comments after 3 months of publicity amongst those affected.
Liam & Davey have received well over 40 responses so far which, whilst obviously aggrieved at the end result of recent events, have often take the time to highlight the efforts in attempting to effect a turnaround of a failed business.
· Castle & Gatehouse now in question
Having seen libelous and defamatory remarks on the blog destroy any opportunity for new investment the directors are left with no option but to close the business. Castle & Gatehouse has been under significant pressure in the past 12 months due to cashflow problems, revoked credit terms and a hugely depressed investment market. The two investors in question have gone to some length to contact all potential new business of note, which in turn has made the continuation of the business impossible. All they have succeeded in doing is bringing down innocent parties and will face legal action as a direct result.
In the current economic environment business is hard enough, and the fragility of the property investment market is such at present that any negative is enough to make a business unsustainable.
We would like to highlight that this blog appears little more than a witchhunt of the lowest grade with regard to Castle & Gatehouse. Neither of these two aggreived investors has ever tried to contact either Mark Black or David Bone Snr and had they have done so most of the inaccuracies posted with regard to C&G would never had arisen. We frankly find it mischievous that they appear to have contacted everyone else bar Castle & Gatehouse directly.
Two points are important to clarify. Firstly, no Collins Bone funds have came across to Castle & Gatehouse. Quite the opposite, Collins Bone owes Castle & Gatehouse tens of thousands of pounds as loans were made, out of good will, from C&G profits in support of C&B at various points. Secondly, Castle & Gatehouse holds no property assets whatsoever and never has done. That is the very point of the financial structure – each investor owns the property that their funds have purchased and renovated. It offers security for each C&G client and was the foundation of the joint venture model. The only assets C&G has ever had were the 50% share of the development profits from each project which are conceded should C&G fail, which this blog has gone a long way towards settling. As such, the action of defaming C&G has served to both kill the profit shares it held as well as the bulk of C&G’s new business pipeline; which has been authenticated and at the same point ruined.
Castle & Gatehouse facilitated the purchase, renovation and sale of investment property for clients who had enough funds to purchase a property for cash (i.e. without mortgage finance) and renovate a property for cash (i.e. without bridging finance). For Sally and Jasmine to claim they relied on Castle & Gatehouse literature is impossible because the literature expressly states each C&G investor needed to have enough cash funds for both the purchase and renovation. £15,000 clearly is nowhere near enough to do that. A small number of investors have at times tried to take the best items of any literature they can find and piece together the investment they want to believe rather than the investment they actually made. Sally and Jasmine unfortunately fall into that category. Had they dealt with Castle & Gatehouse at any point – even for preliminary discussion – they would have spoken to either Mark or David Snr. They have never do so, nor at any point ever been in contact either at present or at any time in the past.
· The man who almost invested £20m…
The first fact to highlight here is that the investment clearly was genuine and the deal was viable. Earlier in the blog, and in several correspondences, Sally & Jasmine intimate that the deal was a fabrication in all or part. This is inaccurate. The business model has been proven and the figures worked which significantly weakens the argument that business was not bona fide as is claimed in several places on the blog.
The language is inaccurate and the statements are both leading and assumptions. No investor has ever made investment ‘into’ Castle & Gatehouse. The business pursues a model whereby properties are bought, renovated and sold for profit. As an integral part of the financial structure each investor is sole owner of the property their funds were used to purchase. Each project is separate and distinct from each other and there are no syndicated investments of any kind. As such, each investment has been made into a dedicated property rather than Castle & Gatehouse directly. Castle & Gatehouse facilitates the deal and is a project manager throughout.
The direct remuneration that Castle & Gatehouse was due to received from the proposed structure was £1m per annum rising to around £2m based on performance. The statement that the fund ‘would not be able to generate sufficient surplus’ is merely opinion and is in fact inaccurate.
The relationship between Castle & Gatehouse, CBS and Collins & Bone is simply stated. Liam & Davey founded Collins Bone many years ago (8-9 years ago) as a partnership to build their own property portfolio. Having amassed some 30+ properties they began to provide property investment services for other investors based on their model of student property and room-by-room rentals. They founded CBS and enjoyed some success in the later stages of the 2000-2007 bull market. David Bone Snr and Mark Black were employed in the later stages of CBS in the months preceding the mortgage collapse. The universal withdrawal of 85%LTV mortgages crippled the CBS financial model, which relied entirely upon the availability of mortgage credit. Several avenues were pursued to try to adjust to the changed landscape and the business model underwent several iterations in response to a worsening credit market. Ultimately CBS was unsuccessful in attempting to re-invent its business model and collapsed.
At this point Mark Black and David Bone Snr pursued a variation of the model through a new vehicle, Castle & Gatehouse, which utilised cash joint ventures to trade property without the need for increasingly sparse mortgage approval. It traded separately to C&B and raised its own funds.
Liam & Davey, in good faith, agreed to take all non-refundable deposits (not loans as stated in the blog) that had collapsed with CBS into Collins & Bone which would offer some protection to existing investors and allow them to benefit from the existing Collins Bone portfolio as a degree of protection.
A gentleman’s agreement existed between Mark & David Snr and Liam & Davey whereby should the variant model used by Castle & Gatehouse take off as expected that the profits dispersed would be used in first instance to redeem Collins & Bone investors. This was an offer of goodwill and nothing more; no guarantee was ever asked or offered, and no written agreement of any kind was made.
Liam & Davey were sole owners of Collins & Bone and had full control of it. It ran separate and distinct to Castle & Gatehouse and pursued an entirely different financial structure. Mark Black and David Bone Snr have never attended an board meeting of Collins Bone, have no control whatsoever over its operation (and never have done), have never spoke to or met the vast majority of its investors, have never had any access to accounts or requested any, and are unrelated to Collins Bone and its investors.
Communication between Collins Bone and its investors has never been authorised by Mark or David Snr and many of the comments on this blog are relating to information taken out of context and out of date. They are presented without authorisation and cannot be relied on.
Unfortunately this scenario has occurred once before and caused the collapse of a previous structure. Mark was the principal behind CBS Fund No.1 and led almost 2 years of meetings to try and get the fund successfully launched, passing rigorous stress tests of both the model and its underlying assumptions along the way. In a series of events that echo this blog, a CBS investor who was claiming £711,000 loss on a £7,500 non-refundable deposit personally called the chairman of the issuing firm to inform him that the entire structure was ‘made up’ and there were ‘no houses and never have been’. The fund lasted around 6 weeks after this statement before authorised support was withdrawn leaving the fund defunct. When dealing with large members of the public it is in an unfortunate truth that one or two persons may well become involved who are not suited to the stress of an investment gone wrong. In the first instance any reasonable bystander would be able to assess that the loss on a £7,500 non-refundable deposit is at most likely to be £7,500, yet the particular incident was able to destroy many years work in a very short space of time.
This libelous blog created by Sally and Jasmine George is of the same manner, and again has served to destroy opportunities that offered hope to a great many investors. Castle & Gatehouse has unfortunately been forced to withdraw any offers of goodwill and furthermore will be forced to close immediately due to the unlikelihood of raising investment under such defamatory statements. We cannot in good conscious continue efforts that may be dashed at any point in the future by wildly inaccurate statements and mischievous conduct of the Georges.
We will be seeking redress via the legal route in relation to slander, defamation, libel and unauthorized use of copyrighted material.
· That twenty million pounds deal…
This point has been addressed above but to state once again, the blog makes light of a genuine firm’s interest in pursuing a £20m investment. It states that they have never heard of Collins & Bone and nor will they have.
To further clarify, Castle & Gatehouse was the firm that dealt with Matterhorn Capital and the proposal was to create a new vehicle – Novocastria – though which to run that particular joint venture. The deal was large enough to warrant a separated vehicle which provided clarity of figures and easy accounting/distribution of profits. It has never been the case that Collins & Bone was ever used for this deal or ever suggested as being involved. The only benefit lay in the good will of Mark Black and David Bone Snr as to whether they would choose to assist Liam & Davey or not. Matterhorn Capital were to own all properties purchased and provide all funds in exactly the same basic structure as all Castle & Gatehouse joint ventures.
We would like to question how this blog claims to have a copy of the draft loan contracts having never spoken to anyone at Castle & Gatehouse at any point. We seek confirmation that those documents have been obtained legally as they are highly valuable.
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