Mount Group Student Natex - Case Update
The joint administrators of a company set up to develop a student accommodation site have provided an update on a dispute with the company’s secured creditor and their investigations into further potential sources of recovery for creditors.
Patrick Lannagan and Julien Irving of Mazars were appointed joint administrators of Mount Group Student Natex in October 2021 by floating charge holder LT Prime Secured SPC. Mr. Irving has since retired and Conrad Pearson of Mazars was appointed in his place.
Mount Group Student Natex experienced problems due to the COVID 19 pandemic and the resulting impact on the construction industry. The company’s primary asset was a part-built student accommodation development known as Natex in Liverpool. Administrators sold the site to Blacklight Capital Partners in July 2022 for £14.1 million.
LT Prime has received distributions totalling over £9 million to date. It claimed additional sums of £370,386.68 for interest accrued from 1 August 2022 to 14 October 2022 and £364,690.75 for enforcement costs and interest. The administrators were not able to agree these additional amounts, so they issued an application to the Court. In October 2023, the Court ordered that LT Prime was entitled to a further £350,000 in costs and expenses under the loan agreement and security.
The joint administrators advise that they are in the process of agreeing and finalising costs for the administration, specifically the position on withholding tax on interest payable to LT Prime, which will directly impact distributions to some 87 unit purchasers who advanced monies and registered unilateral notices against the property title. The administrators are currently seeking specialist advice given the complex interaction between insolvency and tax law. The administrators expect to comment further on expected returns to various categories of creditors once the withholding tax is confirmed.
The administrators also note that they are continuing their investigations into other potential recoveries for creditors. In this regard, the company’s director has provided a detailed funds flow showing the utilisation of the LT Prime loan and customer deposits. The administrators have engaged Dalbergia Consulting to carry out a costing exercise to finalise their review of the company’s financial circumstances and will provide a further update in their next report.
The joint administrators have been assisted by Hill Dickinson. Their latest progress report can be found HERE.