The Great George Street Project - Case Update

A stalled property development site in Liverpool has been sold to Liverpool City Council nearly three years after the project was put into administration, enabling significant returns to be made to a variety of creditors.

The Great George Street Project Limited was established in 2015 as a vehicle to purchase, develop and then sell a development plot of land in Liverpool known as the Great George Street Project. The property is located over a 5 acre mixed use city centre regeneration project and consists of Phase 1 and Phase 3, which were intended to be developed into a mixed-use commercial and residential development, along with Phase 2, which remained in the ownership of Liverpool City Council subject to a Tomlin Order relating to proceedings that were settled prior to the company’s administration.

The costs of construction were to be primarily sourced from investors who were offered various degrees of returns. The company also secured a £5.5 million investment from New China Town Buyers Limited and secured loans from Cambridge and Counties Bank (owed over £4 million) and Francis Molloy, an individual (owed £900,000).

Despite securing significant funding, construction stalled and receivers were appointed over Phases 1 and 3. To achieve a sale of the property as a whole, it was considered appropriate for the company to be placed into administration, and Mr Molloy made an application to Court. James Fish and Craig Johns of Cowgills and Paul Cooper of Begbies Traynor were appointed joint administrators on 25 February 2022.

Upon their appointment, the joint administrators undertook an extensive marketing campaign, which ultimately led to Liverpool City Council making a £10 million offer for the site. Due to the complexities related to title to the different phases, as well as the manner in which the development had been funded, the joint administrators brought an application to the Court to enable them to sell the site to Liverpool City Council free of secured interests. The application was granted on 15 November 2024.

There is a dispute between creditors as to how the Phase 1 proceeds of sale ought to be distributed. The joint administrators intend to return to Court in early 2025 to determine this issue. The sale will not only enable substantial returns to creditors, but also the site to finally be developed.

The administrators’ most recent report (filed in September) can be accessed HERE.

A team from Farleys assisted the joint administrators with the sale. Partner Mark Hague led the insolvency team, while Jane Haymes, Ella Holden and Armin Pishro worked alongside Partner Stephen Greenwood from the commercial property team.