Last October, KPMG’s Brian Glasgow was appointed as trustee of the troubled company to get the best deal for Harlequin’s creditors, including investors, after the company entered insolvency proceedings.
He has raised concerns about Ames’ last ditch attempts to revive the ailing investment scheme, after the company entered receivership in December last year in the hopes of fighting off claims on him and the other directors.
Receivership is a type of corporate bankruptcy where a third party is appointed by bankruptcy courts or creditors to run the company.
In this case, KPMG will be given the ultimate decision-making powers and has full discretion in deciding how all land and assets owned by Harlequin Property SVG will be managed.
At the same time, Harlequin flagship Buccament Bay resort on St Vincent and Grenadines, where the company is headquartered, closed after it failed to pay suppliers.
Ames argues investors will be better off from the sale of the resort if it can be turned around as a going concern than if it is forced to enter bankruptcy.
However, in a report published earlier this month KPMG questions whether the investment can, or should be brought back from the brink of collapse.
The firm blasted Ames’ proposals, saying they have “no basis for believing it likely… [Harlequin] will be able to make a viable proposal to its creditors”.
Where’s the money?
KPMG also stated Harlequin has “not accounted for a significant portion of the deposits that it received from purchasers” of its off plan properties, estimated at £70m according to an English High Court judge.
Referring to statements made by Judge Justice Coulson in December when Harlequin won a $11.6m claim against its former accountancy firm Wilkins Kennedy, the KPMG report said: “Mr Ames was asked where that large sum of money had gone.
“He purported not to understand the question… It was not his money, and he gave the impression that he did not ultimately care about it.”
The KPMG report went on to state that: “Without such an accounting, the Proposal Trustee [Mr Glasgow] is in no position to determine the full extent of assets that may potentially be available for distribution among creditors.”
“The draft proposal [from Harlequin] makes no provision for tracing the funds that may have been wrongfully diverted from the company.
