One of the North East’s most prominent development companies has been put into administration after a court heard that it has debts that could top £200m.
Newcastle-based High Street Group is best known for building Hadrian’s Tower, a luxury flats complex in Newcastle city centre that is the city’s tallest building.
It has also been involved in a number of other high-profile developments in the North East, including a hotel, office and flats development near St James’ Park and plans to build housing on the former Brett Oils site on the banks of the Tyne in Gateshead. In recent years it has also completed schemes in Birmingham and the North West, while other developments in those areas were being planned.
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But the company has suffered huge financial difficulties over recent years and saw one of its subsidiaries put into administration in 2019 after failing to repay an overseas lender. The company’s accounts have since been significantly delayed and two separate auditors have resigned.
Today a hearing at the Insolvency and Companies Court agreed an application to put High Street Grp – the effective parent company of the High Street Group of companies – into administration.
Judge Sebastian Prentis said that “there is no doubt that this is an insolvent company”, adding that “rescuing the company as a going concern is not remotely likely here”.
Judge Prentis said that the company’s debts, based on various submissions to the court, were at least £75m and could total £212m at the end of the administration process. He said that the possibility of securing financial returns to unsecured creditors “appears relatively remote”.
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Judge Prentis had earlier heard submissions from representatives of three separate groups of creditors, each of whom applied for different insolvency practioners to oversee the process.
He appointed Carrie-Anne James, from insolvency practioners SKSi, and Antony Hyams, of Insolvency Plus, to be administrators. The judge said it would be at the forefront of the administrators’ task to investigate High Street Group’s transfer of some of its assets to Hadrian Real Estate, a company that was originally part of High Street Group but which is now under separate ownership.
The court heard that High Street Group was facing four separate winding up petitions and owed money to around 1,500 investors.
In a video sent to investors ahead of the hearing, High Street Group chairman Gary Forrest said that administration was the “only way forward” for the company as part of a rescue plan that he said could see investors paid out in five or six years.
He also admitted to “mistakes being made” by the company, particularly in the way it communicated to investors when it hit financial difficulties.
After the case, a spokesman for High Street Group said: "HSG are happy with the outcome of today’s court hearing and are now focused on the recovery plan."
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